When saving is not enough: The wealth decumulation decision in retirement

Arbeitspapier

In this study, we investigate the wealth decumulation decision from the perspective of a retiree who is averse to the prospect of fully annuitizing her accumulated savings. We field a large online survey of hypothetical product choices for phased drawdown offerings and annuities. While the demand for annuities remains low in our sample, we find significant demand for phased withdrawal products with equity-based asset allocations and flexible payout structures. Consistent with the product choice, the most important self-reported considerations for the wealth decumulation decision are low default risk in the products they purchase, the size of the withdrawal rates, and flexibility in the timing of their withdrawal. As determinants of the decision of how much wealth individuals are willing to draw down, we identify consumers' attitudes towards future economic conditions, the extent to which they are protected against longevity risk, and their desire to leave bequests. Policy implications are discussed.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CFS Working Paper Series ; No. 634

Classification and Topics

• Classification: Wirtschaft ; Household Saving; Personal Finance ; Social Security and Public Pensions ; Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination ; Retirement; Retirement Policies
• Subject: retirement planning ; phased withdrawal accounts ; annuity puzzle

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kieren, Pascal ; Weber, Martin
• Event: Veröffentlichung
• (who): Goethe University Frankfurt, Center for Financial Studies (CFS)
• (where): Frankfurt a. M.
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/206413
• URN: urn:nbn:de:hebis:30:3-515959
• Last update: 10.03.2025, 11:44 AM CET