Why Retirees Aren't Purchasing Lifetime Annuities

A Summary of the Working Paper, Behavioral Obstacles to the Annuity Market

May 2008

A recent Working Paper, entitled Behavioral Obstacles to the Annuity Market by Wei-Yin Hu and Jason S. Scott, published by the Pension Research Council of The Wharton School at the University of Pennsylvania, uses basic principles of behavioral finance in an attempt to explain 'why most retirees do not purchase longevity insurance in the form of lifetime annuities' despite the fact that 'decades of economic analysis... have pointed to annuities as a major component…

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