Why Do Economists Say There is an Annuity Puzzle?
Economists are known for describing the annuity puzzle. The puzzle is: why do people not purchase income annuities (exchange a lump sum payment for a guaranteed lifetime income stream) to the extent predicted by economic theory? A number of explanations have been offered. Today I will not get too much into the explanations for the […]
Are Annuities (SPIAs) Okay When Interest Rates are Low?
Readers of my last blog entry, Annuities and Delayed Social Security, provided many valuable comments, prompting me to now write a follow-up post. Most of the discussion centered on a chart showing the relationship between annuity payout rates and interest rates. That chart was actually a last minute addition, as I saw the picture on […]
