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Annuities, Selection, and the Drawdown of DC Balances

Speaker: Professor James Poterba, MIT and NBER

Topic: Annuities, Selection, and the Drawdown of DC Balances [download the slides here]

Abstract: This presentation will present new estimates of the expected present discounted value of payouts in the single-premium individual immediate annuity market in the United States, and apply the same metric to deferred annuities that do not begin payouts for several decades.  It will highlight the importance of the longer lifespan of the typical annuitant, relative to the typical member of the population at large, for annuituy valuation, and discuss the role of required minimum distributions from DC plan accounts as an alternative to annuitization.