Philipp Schreiber|Martin Weber
Time inconsistent preferences and the annuitization decision
University of Mannheim|Centre for Economic Policy Research|University of Mannheim
entering retirement many people face decision whether would like receive defined contribution account balance lump sum distribution annuitize amount fact people tend choose lump sum distribution even economic reasons suggest otherwise called annuity puzzle results large online survey show people behave time inconsistent manner older people stronger tendency choose lump sum younger people effect therefore low real life annuitization explained hyperbolic discounting age effect considerably stronger participants answer simple time preference questions inconsistently findings suggest commitment devices help increase annuitization rates