Navigating Complex Financial Decisions at Retirement: Evidence from Annuity Choices in Public Sector Pensions
Choices regarding the disposition of wealth at retirement can have substantial implications for retirement income security. We analyze the factors determining annuity option choices offered by a public sector defined pension plan with no default annuity option. Using combined administrative records and survey data, we explore the role of individual and household characteristics as well as risk preferences, time preferences, and financial literacy. The evidence is consistent with predictions over which households might benefit most from each annuity option. Comparing retirees who chose different annuities, we find that these groups of retirees report very different levels of well-being in retirement.
Navigating Complex Financial Decisions at Retirement: Evidence from Annuity Choices in Public Sector Pensions, Robert L. Clark, Robert G. Hammond, David Vanderweide. in Incentives and Limitations of Employment Policies on Retirement Transitions, Clark and Newhouse. 2019
Robert L. Clark & Robert G. Hammond & David Vanderweide, 2019. "Navigating complex financial decisions at retirement: evidence from annuity choices in public sector pensions," Journal of Pension Economics and Finance, vol 18(04), pages 594-611. citation courtesy of