Summarize this content material to 1000 phrases AbstractA longstanding puzzle within the economics of insurance coverage, family finance, and public coverage is why so few people annuitize their wealth. This paper describes outcomes from a current survey of individuals with investable belongings over $100,000 that included a randomized management trial module eliciting people’ valuations for a easy fast annuity, in addition to whether or not they’re keen to pay extra for annuities with survivor advantages or with a liquidity clause permitting them to withdraw the remaining premium. The most important end result means that half of these surveyed wish to annuitize at prevailing market annuity costs, a a lot larger share than the 12 p.c of this group who really do purchase annuities. By way of annuity options, people are unwilling to pay extra for a demise profit or a liquidity possibility, underscoring that it isn’t supposedly aversive options of annuities stopping extra widespread adoption. Furthermore, the evaluation calibrates a lifecycle mannequin utilizing the Well being and Retirement Research. With cheap choice parameters, the mannequin means that annuitization charges for people with investable belongings over $100,000 must be even larger than 50 p.c, additional suggesting that the wedge between the 50 p.c that wish to annuitize and the 12 p.c that do will not be because of preferences or financial circumstances. The outcomes discover help for “channel components” – difficulties related to really buying an annuity – as a significant obstacle to annuitization.
How A lot Do Folks Worth Annuities and Their Added Options? – Heart for Retirement Analysis