Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/187482 
Year of Publication: 
2018
Series/Report no.: 
CFS Working Paper Series No. 607
Publisher: 
Goethe University Frankfurt, Center for Financial Studies (CFS), Frankfurt a. M.
Abstract: 
A recent US Treasury regulation allowed deferred longevity income annuities to be included in pension plan menus as a default payout solution, yet little research has investigated whether more people should convert some of the $15 trillion they hold in employer-based defined contribution plans into lifelong income streams. We investigate this innovation using a calibrated lifecycle consumption and portfolio choice model embodying realistic institutional considerations. Our welfare analysis shows that defaulting a small portion of retirees' 401(k) assets (over a threshold) is an attractive way to enhance retirement security, enhancing welfare by up to 20% of retiree plan accruals.
Subjects: 
life cycle saving
household finance
annuity
longevity risk
401(k) plan
retirement
JEL: 
G11
G22
D14
D91
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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