Chair of Investment, Portfolio Management and Pension Finance
Goethe University Frankfurt
Many defined contribution plans pay benefits as a lump sum, putting retirees’ lifetime income security at risk. Longevity income annuities address this concern.
Participants in self-directed retirement plans may fail to understand and mitigate investment and longevity risk, putting their retirement security at risk. Variable deferred annuities with lifetime income and investment guarantees could rectify the problem.
This paper assesses the impact of variable investment-linked deferred annuities (VILDAs) on lifecycle consumption, saving, and portfolio allocation patterns given stochastic and systematic mortality.