Turning Wealth into Lifetime Income: The Challenge Ahead

17 Pages Posted: 18 Sep 2010 Last revised: 26 Nov 2011

See all articles by Olivia S. Mitchell

Olivia S. Mitchell

University of Pennsylvania - The Wharton School; National Bureau of Economic Research (NBER)

John Piggott

University of New South Wales (UNSW) - Australian School of Business, School of Economics

Date Written: September 15, 2010

Abstract

Longevity risk management was a family obligation in the old days; in the 20th century, as development, migration, and the scattering of families became more common, government and employers took over the role of providing longevity insurance. In the 21st century, demographic shift and government overspending has put all of these sources under stress. This chapter asks whether the future will be an era of more general and formalized private longevity insurance provision through annuities, and we explore answers across several different countries. Some nations have adopted mandatory annuitization; others have mandatory accumulation plans without requiring annuitization; and still others remain heavily dependent on traditional social security with private annuities representing what might best be described as a residual market. Also in some nations, innovations in longevity insurance products have been embraced, apparently rather successfully, while in others – notably among emerging economies, people lack a significant annuity market.

Keywords: annuities, markets, longevity, insurance, mortality, countries, policy, pension, government, retirement

Suggested Citation

Mitchell, Olivia S. and Piggott, John, Turning Wealth into Lifetime Income: The Challenge Ahead (September 15, 2010). Pension Research Council WP 2010-13. Available at SSRN: https://ssrn.com/abstract=1678081 or http://dx.doi.org/10.2139/ssrn.1678081

Olivia S. Mitchell (Contact Author)

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104-6365
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

John Piggott

University of New South Wales (UNSW) - Australian School of Business, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

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