What Is the Value of the Annuity Market?

This presentation looks at the impact of annuitization on the decumulation phase of a pension plan, considering individuals with and without access to annuitization. We will look at the welfare loss of those who do not annuitize and consider the design of optimal products in both scenarios while studying the effects of various factors such as interest rates and mortality risk. Notably, the findings reveal that individuals with time-additive preferences face a significant wealth reduction of 22% upon retirement if they choose not to annuitize.