What Matters in the Annuitization Decision?
By Mohamad Hassan Abou Daya, Carole Bernard
We conduct a simultaneous test for several rational and behavioral factors which have been hypothesized to affect the uptake of life annuities on a sample of American individuals. In addition, we investigate whether analysts’ stock market expectations affect the decision to annuitize retirement wealth. We provide evidence that the effect of such expectations depends on the level of trust in them. We attribute our findings to the availability heuristic and default probabilities. Our results provide guidance for policymakers and annuity providers as well as venues for future research.
Source: SSRN
