Implications of Expanded Annuitization for Old-Age Well-Being

This document is about evaluating the potential effects of more widespread annuitization of wealth in retirement. It uses a utility maximization model to simulate the impact of annuitizing defined contribution and IRA assets on consumption, old-age poverty, retirement satisfaction, and lifetime utility. The analysis finds that increased annuitization can raise consumption in old age, reduce old-age poverty, and boost retirement satisfaction, with the largest benefits coming from the use of real (inflation-adjusted) annuities.