IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Annuity Risk: Volatility and Inflation Exposure in Payments from Immediate Life Annuities

  • Laura Ballotta

    ()

    (Department of Actuarial Science and Statistics, City University London)

  • Steven Haberman

    ()

    (Department of Actuarial Science and Statistics, City University London)

Registered author(s):

    Some researchers have raised concerns about significant volatility in initial payments from fixed immediate life annuities and the subsequent inflation risk during the retirement period. This paper investigates these concerns using recent high frequency data. It finds that while there is significant volatility in initial payments from nominal fixed annuities, phased purchases of fixed annuities can reduce their volatility. It also finds that an inflation-adjusted annuity may address both the volatility and inflation risk problems. The results are applicable to current discussions about Social Security and trends toward the defined contribution type of pension plan.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.cerp.carloalberto.org/wp-content/uploads/2008/12/WP_24.pdf?d2641f
    Download Restriction: no

    Paper provided by Center for Research on Pensions and Welfare Policies, Turin (Italy) in its series CeRP Working Papers with number 24.

    as
    in new window

    Length: 31 pages
    Date of creation: Aug 2002
    Date of revision:
    Publication status: published in Fornero E. and E. Luciano (eds), "Developing an Annuity Market in Europe", Cheltenham: Edward Elgar, 2004
    Handle: RePEc:crp:wpaper:24
    Contact details of provider: Postal: Via Real Collegio 30, 10024 Moncalieri (TO)
    Phone: 39 011 6705040
    Fax: +39 011 6705042
    Web page: http://www.cerp.carloalberto.org
    Email:


    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:crp:wpaper:24. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Silvia Maero)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.