Annuity Markets

James M. Poterba

in The Oxford Handbook of Pensions and Retirement Income

Published in print July 2006 | ISBN: 9780199272464
Published online September 2009 | | DOI:

Series: Oxford Handbooks in Business and Management C

 Annuity Markets

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This article summarizes the current operation of annuity markets and the potential role of these markets in providing retirement security. It is divided into six sections. The first describes the basic structure of annuity products, with particular reference to those that are currently available in the United States and the United Kingdom. The second section explains the standard analysis of why annuities are attractive to individuals who face uncertainty about length of life, and describes several hypotheses that have been advanced to explain the limited size of private annuity markets. The third section describes the standard methodology for comparing the expected present value of annuity payouts with their cost. The fourth section examines several aspects of individual demand for annuity products. The fifth section briefly discusses the role of regulation in annuity markets. The brief conclusion considers a number of emerging issues that bear on the role of private annuity markets in providing retirement-income security.

Keywords: retirement security; annuity markets; annuity products; United States; retirement income; length of life

Article.  9232 words. 

Subjects: Business and Management ; Business Strategy

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