Economic theory suggests people would be interested in buying annuities, but the outlook for them is bleak. Annuities pay a stream of monthly payments to retirees in exchange for a premium, as opposed to 401(k) plans, which generally pay out as a lump sum. Annuities protect people from outliving their resources, yet the market for this benefit is small. Why is this? For one, people might already have a good amount of annuitized wealth in the form of Social Security and pensions, and annuities are expensive for the average person because they are priced for the long-lived. Also, people have their concerns about insurance companies following the financial crisis.
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What about Annuities? (SmartMoney)
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Staff Writer
March 23, 2012 at 10:54 AM
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