Annuitize

The actual process of converting a sum of money into a stream of income and the point at which annuity payments begin. For example, with Social Security the sum of money that has hypothetically been accumulating over one’s working years would be annuitized when the person chooses to begin receiving Social Security benefits.

Harvard Professor Roland Fryer – The Annuity Puzzle and Why People are More Comfortable Flying if They Can See the Cockpit

The annuity puzzle refers to the fact that few people choose to annuitize even a portion of their accumulated savings even though they have many good and rational reasons to do so.  Psychological and behavioral barriers are key factors that affect decisions involving annuities, retirement finances, and...

Pages