Your article was successfully shared with the contacts you provided.
It’s not just that retirees dislike annuities; it’s that they go out of their way to act on that dislike. For example, a study in the Journal of Public Education says that even when annuity is the default provision, people will go out of their way to fill out more paperwork to receive a lump sum payment that they would then have to invest themselves. That says a lot. In fact, only 10 percent of the people leaving their job after 65 pick the annuity option. Finance professors, who feel it is in the retiree’s best interest to choose an annuity, call this gap in behavior the “annuity puzzle.”
The study explains some of the reasons behind this “annuity puzzle.” For example, people are less likely to choose an annuity option if they own a home, have kids and have a higher net worth. On the other hand, the study’s researcher found that retirees who are married and who have been shown mortality tables are more likely to purchase an annuity.
Complete your profile to continue reading and get FREE access to BenefitsPRO.com, part of your ALM digital membership.
Your access to unlimited BenefitsPRO.com content isn’t changing. Once you are an ALM digital member, you’ll receive:
Critical BenefitsPRO.com information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events.
Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions.
Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses,
including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
61% of employers surveyed consider caregiving benefits to be a top priority for their business and employees, yet 22% consider themselves as below average in developing caregiving benefits. Download this info sheet to help your clients remain competitive by offering a care benefit package.