ANNUITIZATION DECISIONS OF RETIREES: THE ROLE OF RISK AVERSION AND FINANCIAL ADVICE Cover Image

ANNUITIZATION DECISIONS OF RETIREES: THE ROLE OF RISK AVERSION AND FINANCIAL ADVICE
ANNUITIZATION DECISIONS OF RETIREES: THE ROLE OF RISK AVERSION AND FINANCIAL ADVICE

Author(s): Nathan HARNESS, John R. SALTER, Swarn Chatterjee
Subject(s): Demography and human biology, Socio-Economic Research
Published by: Editura Universităţii »Alexandru Ioan Cuza« din Iaşi
Keywords: Annuities; Retirement Decisions; Risk Aversion; Financial Planning;

Summary/Abstract: This study utilizes a nationally representative proprietary dataset to examine the annuitization decisions of retirees. The results indicate that consulting a financial advisor, retirement duration, and risk aversion are positive predictors of annuity ownership. The results also indicate that retirees with defined benefit plans are more likely to own annuities. Additionally, the results suggest that households with retirement duration of ten years or longer are more likely to start receiving their annuity distributions. This paper contributes to the research on annuitization decisions of retirees. The unique contributions of our study include establishing the relationship between risk aversion, financial advice, and annuity ownership decisions of households using a nationally representative dataset. Our empirical model controls for a number of socioeconomic, demographic and income related variables that have been drawn from prior literature.

  • Issue Year: 2012
  • Issue No: 9
  • Page Range: 35-52
  • Page Count: 18
  • Language: English
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