Annuity Valuation, Long-Term Care, and Bequest Motives

John Ameriks, Andrew Caplin, Steven Laufer, Stijn Van Nieuwerburgh

    Research output: Chapter in Book/Report/Conference proceedingChapter

    Abstract

    Financial security in retirement has traditionally meant having a steady flow of annuity income as long as one lives - a definition enshrined in the Social Security system. Earlier research has stressed a more holistic approach, which focuses on the match between resources and spending needs. Using this formulation this chapter estimates annuity values given long-term care concerns and bequest motives, where these estimated values are consistent with low observed demand for standard annuities. The chapter extends this model to value non-standard annuities with various security-enhancing features that may be of value to retirees.

    Original languageEnglish (US)
    Title of host publicationRecalibrating Retirement Spending and Saving
    PublisherOxford University Press
    ISBN (Electronic)9780191720734
    ISBN (Print)9780199549108
    DOIs
    StatePublished - Jan 1 2009

    Keywords

    • Bequest
    • Consumption
    • Health shock
    • Healthcare
    • Long-term-care insurance
    • Longevity insurance
    • Medicaid aversion
    • Precautionary motive
    • Reversible annuity

    ASJC Scopus subject areas

    • Business, Management and Accounting(all)

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