Converting Retirement Savings into Income: Annuities and Periodic Withdrawals (CRS Report for Congress)
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| Release Date |
Revised Feb. 2, 2009 |
| Report Number |
R40008 |
| Report Type |
Report |
| Authors |
Janemarie Mulvey, Specialist in Aging Policy; Patrick Purcell, Specialist in Income Security |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
This report has two sections. The first section describes four kinds of risk that retirees face inretirement: longevity risk, investment risk, inflation risk, and the risk of large, unexpectedexpenses for medical care or long-term care. It then describes the basic features of life annuitiesand examines some of the reasons that the market for these annuities remains small, in spite of theprotection that they provide against outliving one's retirement assets. The second section of thereport describes various strategies for self-annuitizing and presents the results of an analysis thatCRS conducted to estimate the probability that an individual who elects to self-annuitize wouldexhaust his or her retirement assets before death.
