The determinants of annuitization: evidence from Sweden
2014 (English)Report (Other academic)
This paper uses unique micro data from a Swedish occupational pension plan to study the determinants of annuitization. The data is merged with national administrative data to create a large data set with rich individual background characteristics. The pension can either be withdrawn as a life annuity or during a fixed number of years with a minimum of ve years. Low accumulation of assets is strongly associated with the choice of the 5-year payout. Consistent with the predictions of a life-cycle model, retirees who choose the 5-year payout are in worse health and exhibit higher ex-post mortality rates than annuitants. I alsofind that the parents of annuitants live longer than the parents of those who choose the 5-year payout. This suggests that individuals form expectations about how long they are likely to live based on the life-span patterns of their parents and take this into account when they decide whether to annuitize or not.
Place, publisher, year, edition, pages
Uppsala, 2014. , 34 p.
Working paper / Uppsala Center for Fiscal Studies, Uppsala University, 2014:13
Annuity puzzle; Longevity insurance; Occupational pension; Adverse
Research subject Economics
IdentifiersURN: urn:nbn:se:uu:diva-236362OAI: oai:DiVA.org:uu-236362DiVA: diva2:764203