Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/268888 
Year of Publication: 
2023
Series/Report no.: 
CFS Working Paper Series No. 684
Publisher: 
Goethe University Frankfurt, Center for Financial Studies (CFS), Frankfurt a. M.
Abstract: 
This paper investigates retirees' optimal purchases of fixed and variable longevity income annuities using their defined contribution (DC) plan assets and given their expected Social Security benefits. As an alternative, we also evaluate using plan assets to boost Social Security benefits through delayed claiming. We determine that including deferred income annuities in DC accounts is welfare enhancing for all sex/education groups examined. We also show that providing access to well-designed variable deferred annuities with some equity exposure further enhances retiree wellbeing, compared to having access only to fixed annuities. Nevertheless, for the least educated, delaying claiming Social Security is preferred, whereas the most educated benefit more from using accumulated DC plan assets to purchase deferred annuities.
Subjects: 
lifecycle saving
retirement plan
annuity
longevity
delayed claiming
household finance
JEL: 
G11
G22
D14
D91
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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