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Annuities and Your Nest Egg: Reforms to Promote Optimal Annuitization of Retirement Capital

Author

Listed:
  • Norma L. Nielson

    (University of Calgary)

Abstract

Retiring babyboomers are driving a shift from retirement-fund accumulation to decumulation, but they need better choices to protect against longevity risk. The author says to enhance retirees' options, policy reforms should level the playing field for annuity products and promote market-driven variety of choice, thus ensuring retirees have at least some funds available to them for the long haul. Policy changes should improve the "infrastructure" for decumulation products by gathering high-quality mortality data and ensuring access to that data for annuity pricing. Policy should also provide the proverbial level playing field by integrating insurance, banking, pension, and tax regulations so these are neutral factors in the consumer decision to annuitize. Other reforms should enhance the ability of private annuity sellers to offer a range of decumulation products and promote consumer education.

Suggested Citation

  • Norma L. Nielson, 2012. "Annuities and Your Nest Egg: Reforms to Promote Optimal Annuitization of Retirement Capital," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 358, August.
    • Handle: RePEc:cdh:commen:358
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    References listed on IDEAS

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    Cited by:

    1. Jana Steele & Mel Bartlett & Angela Maserolle, 2014. "Target- Benefit Plans in Canada – An Innovation Worth Expanding," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 411, July.
    2. William Robson & Alex Laurin, 2014. "Outliving Our Savings: Registered Retirement Income Funds Rules Need a Big Update," e-briefs 175, C.D. Howe Institute.
    3. William B.P. Robson & Alexandre Laurin, 2015. "Drawing Down Our Savings: The Prospects for RRIF Holders Following the 2015 Federal Budget," e-briefs 210, C.D. Howe Institute.
    4. Philip Cross & Philippe Bergevin, 2012. "Turning Points: Business Cycles in Canada Since 1926," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 366, October.
    5. Philippe Bergevin & William B.P. Robson, 2012. "More RRBs, Please! Why Ottawa Should Issue More Inflation-Indexed Bonds," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 363, September.

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    More about this item

    Keywords

    Pension Papers; Canada; retirement; retirement capital; decumulation;
    All these keywords.

    JEL classification:

    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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