Tag: annuity market
My colleagues and I are beginning to think seriously about embedding annuities in 401(k) plans. 401(k) plans generally offer lump sums, which means that retirees have to decide how much to withdraw each year. They face the risk of either spending too quickly and outliving their resources or spending too conservatively and consuming too little.&nbs…
Are annuities more valuable when interest rates are low? That seems counterintuitive. After all, annuities produce higher monthly incomes when interest rates are high. But consider the extreme case of a zero interest rate. That scenario eliminates the option of living off the income from investments in retirement. The choices come down to various alternativ…
