How Do Retirees Value Life Annuities ? Evidence from Public Employees

  title={How Do Retirees Value Life Annuities ? Evidence from Public Employees},
  author={J. W. T. Chalmers and Jonathan Reuter},
Economists have long been puzzled by the low demand for life annuities. To shed new light on this puzzle, we study payout choices in the Oregon Public Employees Retirement System, where each retiree must choose between a lump sum and a life annuity. Notably, the average life annuity we study is better than actuarially fair when compared to the lump sum and 85% of retirees choose the life annuity. Whether and how retirees respond to variation in the value of life annuity payments depends… CONTINUE READING
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