Retirement Annuity Design in an Inflationary Climate
In: Financial Aspects of the United States Pension System
This paper examines the tilt and risk-return characteristics of real retirement incomes provided by variable annuities tied to bills, long-term bonds, stocks and a mixed portfolio which combines all three. The analysis emphasizes the riskiness of the real value of benefits provided by conventional nominal annuities. The Rockefeller Foundation Plan, together with the "ad hoc" cost-of-living adjustments made by many large firms, are interpreted as representative market responses to increased inflation uncertainty. The paper examines the annuity designs implicit in these innovations, and shows them to be variants of the standard variable annuity.
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- Martin Feldstein, 1983.
"Inflation and the Stock Market,"
in: Inflation, Tax Rules, and Capital Formation, pages 186-198
National Bureau of Economic Research, Inc.
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