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Why the Government Should Learn Which Annuities Are Useful

The right policy could make annuities easier to use for retirement savers.

When retirement wonks (like us) look at the state of the American experiment in defined-contribution retirement plans, one problem they almost always see is that not enough people annuitize enough of their assets when they retire. These retirement wonks then conclude, sensibly enough, that the government should do more to encourage annuitization.

Armed with these insights, they tend to recommend that Congress and the Department of Labor, which regulates private-sector employer-sponsored retirement plans, make more annuities available. (Here are some examples of government reports and even a journal article I wrote a few years ago making this case.)