Tag: annuities
The brief’s key findings are: Households now retiring need to transform their 401(k) and IRA savings into retirement income. One way is to delay claiming Social Security to increase their monthly benefit, using savings to pay current expenses while they wait. In effect, they are buying an annuity from Social Security: The savings used is the “price” and the increas…
Abstract This paper develops a consumption and portfolio-choice model of a retiree who allocates wealth among four assets: a riskless bond, a risky asset, a real annuity, and housing. Unlike previous studies that treat health expenditures as exogenous negative income shocks, this paper builds on the Grossman model to endogenize health expenditures as investments in…
