Work

Betting on Death and Capital Markets in Retirement: A Shortfall Risk Analysis of Life Annuities

Year: 2005

Type: report

Abstract: Retirees must draw down their accumulated assets in an orderly fashion, so as not to exhaust their funds too soon.We compare alternative phased withdrawal strategies to a life annuity benchmark using German data; one particular phased withdrawal rule seems attractive, as it offers relatively low expected shortfall risk, good expected payouts for the retiree during his life, and some bequest potential; results are similar for the US case.Delayed annuitization may also appeal, as it offers higher expected benefits with lower expected shortfalls.Requiring unisex mortality tables in annuity pric-ing raises women's risks under a phased withdrawal program.

Source: National Bureau of Economic Research

DOI: 10.3386/w11271

Authors: Ivica Dus, Raimond Maurer, Olivia Mitchell

Institutions: Goethe University Frankfurt, University of Pennsylvania

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W1523163761

Cites: 49

Cited by: 16

Related to: 10