Number: R40008
Title: Converting Retirement Savings into Income: Annunities and Periodic Withdrawals
Authors: Janemarie Mulvey, Specialist in Aging Policy; Patrick Purcell, Specialist in Income Security 
Abstract: This report has two sections. The first section describes four kinds of risk that retirees face in retirement: longevity risk, investment risk, inflation risk, and the risk of large, unexpected expenses for medical care or long-term care. It then describes the basic features of life annuities and examines some of the reasons that the market for these annuities remains small, in spite of the protection that they provide against outliving one's retirement assets. The second section of the report describes various strategies for self-annuitizing and presents the results of an analysis that CRS conducted to estimate the probability that an individual who elects to self-annuitize would exhaust his or her retirement assets before death.
Pages: 33
Date: December 1, 2008