Many variable annuities provide money-back guarantees and market guarantees on invested principal. Embedded in some of these guarantees are stochastic maturity put options with adjustable strike prices. These variable annuities can be surrendered or lapsed at any time. The lapse option when exercised rationally represents an American style sell-back option that is exercised by the policyholder ...

Choices of retirement income stream products pose the usual challenges associated with credence goods. Moreover, high perceived (and actual) risk, irreversibility of most purchases, high expenditure, little opportunity for social learning and distant consequences make these choices even more intimidating to consumers. Nevertheless, governments worldwide have started to shift more responsibility...

A[I]f you observe, people always live forever when there is any annuity to be paid them An annuity is a very serious business; it comes over and over every year, and there is no getting rid of it.@ As baby boomers near retirement, policy analysts have begun to ask how this cohort will handle the process of drawing down its retirement saving. One mechanism for doing this is the life annuity, an ...

Substantial research attention has been devoted to the pension accumulation process, whereby employees and those advising them work to accumulate funds for retirement. Until recently, less analysis has been devoted to the pension decumulation process – the process by which retirees finance their consumption during retirement. This gap has recently begun to be filled by an active group of resear...