Book Description

Dramatic advances in life expectancy mean that today's retirees must plan on livinginto their eighties, their nineties, and even beyond. Longer life expectancies are the symbol of aprosperous society, but this progress also means that some retirees will need to plan conservativelyand cut back substantially on their living standards or risk living so long that they exhaust theirresources. This book examines the role that life annuities can play in helping people protectthemselves against such outcomes.A life annuity is an insurance product that pays out a periodicamount for as long as the annuitant is alive, in exchange for a premium. The book begins with ahistory of life annuity markets during the twentieth century in the United States and elsewhere. Itthen explores recent trends in annuity pricing and money's worth, as well as the economic valuegenerated for purchasers of these products. The book explains the potential importance ofinflation-protected annuities and stock-market-linked variable annuities in providing more completeretirement security. The concluding chapters examine life annuities in various institutionalsettings and the tax treatment of annuity products.