Although researchers have shown that purchasing longevity insurance at retirement guarantees pensioners of a high annual income for the rest of their lives, most retirees (who have a choice) choose to take the lump sum and self-manage the portfolio. This is a long-standing puzzle called the...

In recent years, the deferred annuity has aroused intensive discussion as a retirement solution product. In the course of understanding reasons behind the low demand of immediate annuities, two behavioural models, cumulative prospect theory and the hyperbolic discount model, have suggested that...

In this paper, we integrate investment decisions in the post-retirement decumulation period with that of the deferred annuity purchase to provide a lifetime decumulation solution. Based on Monte Carlo simulation and historical experience, we use the Perfect Withdrawal Rate (PWR) as a tool to...

Purpose: Although it has been proved theoretically that annuities can provide optimal consumption during one’s retirement period, retirees’ reluctance to purchase annuities is a long-standing puzzle. The purpose of this paper is to use behavioral model to analyze the low demand for...