Retiring babyboomers are driving a shift from retirement-fund accumulation to decumulation, but they need better choices to protect against longevity risk, according to a report released today by the C.D. Howe Institute. In “Annuities and Your Nest Egg: Reforms to Promote Optimal Annuitization of Retirement Capital,” the University of Calgary’s Norma Nielson says to enhance retirees’ options, policy reforms should level the playing field for annuity products and promote market-driven variety of choice, thus ensuring retirees have at least some funds available to them for the long haul.
“During this life phase, important choices must be made about how much cash we need to live on in the near term, and how long we should make our savings last, taking increased life expectancy into account,” said Dr. Nielson. “We need an enhanced, efficient annuity market with diverse products to deal with that risk.”