Retirement Finance; Alternative Risk; The Economy, Markets and Investing; Society and Capital
Mar 29, 2022
Trying to contextualize inflation data
Mar 28, 2022
Swag on Annuity Discount Rate
This is a back of the cocktail check of implied annuity discount rates. Not sure I'm doing this right. If I trust immediateannuities.com ("IA")(not sure how those are priced? market products available to IA? CANNEX? idk) and AAcalc.com (guess based on a number of inputs including the current yield curve which gives a price close to the former) and if for my model I use SOA annuitant conditional survival probabilities for 65yo male and a 5% load and assume a simple immediate annuity and if I solve for the average simple discount that matches my (discrete) model to the basic IA price, the discount looks like it is around 3.6%. I can't remember the last time I did this, maybe a couple years ago and it was under 3%. I have not looked at the yield curve but if I did I'm not sure how an insurer or AAcalc uses it because the current 30 year is still just a little over 2.5. Anyone know how observable rates work in pricing annuities?