This project analyzes the retirement income choices of participants in the retirement plans managed by TIAA, one of the largest defined contribution (DC) pension managers in the United States. Annuitization decisions are important as a mechanism of longevity insurance, converting assets into a lifelong income stream that continues no matter how long an individual lives. TIAA has experienced a gradual decline in annuitization rates since 1989, prior to which most participants were required to purchase some type of fixed or variable retirement annuity. To better understand this decline, and annuitization decisions more generally, the project explores how annuitization rates are affected by interest rates, the size of account balances, and whether account owners are covered by Social Security or a publicly-sponsored state retirement plan that substitutes for Social Security.
Annuity Demand by Defined Contribution Plan Participants
Investigators: Jeffrey R. Brown (University of Illinois and NBER), James Poterba (MIT and NBER), and David P. Richardson (TIAA Institute)
Measuring sources of income and adequacy
Communication and behavior