Annuity Puzzle – Richard Thaler

See the linked article by Nobel prize winning economist Richard Thayer that was referenced in last week’s Michael Finke webinar. 

• Using standard assumptions, economists have shown that buyers of annuities are assured more annual income for the rest of their lives, compared with people who self-manage their portfolios
• Economists call this the annuity puzzle (the puzzle being why more people don’t buy them)
• Offload the risk of living too long to the insurance company.  Spend more, worry less.