Optimal Annuitization with Stochastic Mortality Probabilities / / Felix Reichling, Kent Smetters

• Autore: Reichling Felix
• Pubblicazione: Cambridge, Mass, : National Bureau of Economic Research, 2013; Washington, DC : , : Congressional Budget Office, , 2013
• Descrizione fisica: 1 online resource : illustrations (black and white)
• Soggetto topico: Microeconomic Behavior: Underlying Principles; Household Saving • Personal Finance; Household
• Classificazione: D01; D14; H31
• Altri autori: SmettersKent
• Note generali: July 2013.
• Nota di bibliografia: Includes bibliographical references (pages 41-44).
• Sommario/riassunto: The conventional wisdom dating back to Yaari (1965) is that households without a bequest motive should fully annuitize their investments. Numerous market frictions do not break this sharp result. We modify the Yaari framework by allowing a household's mortality risk itself to be stochastic. Annuities still help to hedge longevity risk, but they are now subject to valuation risk. Valuation risk is a powerful gateway mechanism for numerous frictions to reduce annuity demand, even without ad hoc "liquidity constraints." We find that most households should not annuitize any wealth. The optimal level of aggregate net annuity holdings is likely even negative.
• Titolo autorizzato: Optimal Annuitization with Stochastic Mortality Probabilities
• Formato: Materiale a stampa
• Livello bibliografico: Monografia
• Lingua di pubblicazione: Inglese
• Record Nr.: 9910717321103321
• Lo trovi qui: Univ. Federico II
• Serie: Working Paper Series (National Bureau of Economic Research) ; no. w19211.