Why Annuities Are Underutilized (And What Could Be Done About It)

August 19, 2020 by Jack Guttentag

As the only way in which retirees can profit by sharing mortality risk with others in the same age bracket, annuities should be in the retirement plans of almost all retirees. That they are not speaks to the chaotic nature of our private retirement system.

Retirees who could profit from an annuity but don’t, for reasons discussed below, suffer lower spendable funds over their life spans. The loss is particularly large among homeowners with limited or no financial assets. These are the “cash-poor-house-rich retirees, who comprise a large proportion of all retirees.

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Originally Posted at Forbes on August 14, 2020 by Jack Guttentag.