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How Much Do People Value Annuities and Their Added Features?

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  • Karolos Arapakis
  • Gal Wettstein

Abstract

While annuities offer retirees a reliable stream of lifetime income, few people purchase them. To probe people’s perceptions of annuities, a new survey queried those near or in retirement with over $100,000 in financial assets. About half of respondents say they would be willing to buy an annuity at prevailing market rates, while just 12 percent actually do so. The study tested whether low annuity take-up could be explained by a lack of liquidity or the inability to make bequests, but found no such evidence. In short, people may be deterred not by a lack of interest in annuities but by a lack of knowledge of the product and how to buy it.

Suggested Citation

  • Karolos Arapakis & Gal Wettstein, 2024. "How Much Do People Value Annuities and Their Added Features?," Issues in Brief ib2024-01, Center for Retirement Research.
    • Handle: RePEc:crr:issbrf:ib2024-01
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