City Research Online

Abstract

In this paper, we consider post-retirement decumulation strategies after the purchase of a deferred annuity (DA) and explore the sensitivity of the retirement incomes and asset allocation decisions to the magnitude of the deferred annuity prices. We use the Perfect Withdrawal Amount (PWA) as a tool to understand the role of the different annuity price determinant factors and identify optimal asset allocations. We find that, when the selected deferred period is very long, the maximum PWA during the decumulation stage is insensitive to the annuity price loading. Moreover, the selection of the deferred period is a very sensitive input that affects annual withdrawals.

Publication Type:	Article
Publisher Keywords:	Deferred annuities; Perfect Withdrawal Amounts; Decumulation strategies; Postretirement asset allocation
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce H Social Sciences > HG Finance
Departments:	Bayes Business School Bayes Business School > Actuarial Science & Insurance Bayes Business School > Finance
SWORD Depositor:	Symplectic Administrator

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