Insights into the annuity puzzle
There is now substantial literature on the behavioral economics of retirement saving, which has stressed that both behavioral and institutional factors play an important role in determining saving accumulations
Why do most people love pensions but hate annuities? That, in essence, is the “annuitization puzzle” spoken of by Franco Modigliani, a Nobel laureate in economics. He noted that other than in the form of group insurance through pension systems, annuity contracts are extremely rare.
Twenty-five
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