Three essays on longevity insurance and households' asset allocation decisions throughout the life cycle




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Saving for retirement is one of the most important financial goals when individuals talk about their financial plans with financial advisors. It is critical to understand individuals’ retirement portfolio composition and why they make such decisions. The following three essays explore how individuals value annuitized income as part of their retirement portfolios from different perspectives. The first two essays focus on the demand for annuity products driven by the future expectation of social security income and tax incentives. The third essay focus on how labor income risk associated with job industries influences stock market participation for annuity owners and non-annuity owners. The first essay uses the 2016 wave of the Health and Retirement Study (HRS). The HRS is a survey of Americans aged 50 and older and includes individuals’ financial information. This essay analyzes the relationship between households' attitudes toward future social-security benefits and their ownership of annuities. The second essay uses the 2019 wave of the Survey of Consumer Finance (SCF). This essay analyzes the relationship between households' incentives to maximize tax-advantaged contributions to 401(k) accounts and their ownership of variable annuities. The third essay used the 2018 wave of Health and Retirement Study (HRS) and the macro industry average unemployment rate between April 2018 and April 2019 from the Bureau of Labor Statistics. This essay explores the relationship between annuity ownership and stock market participation depending on industry-related unemployment risk.

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Annuity, Household Asset Allocation, Retirement Planning.