On the The Annuity Puzzle by Elm Partners

This recent article (The Annuity Puzzle: How Big is the Free Lunch Being Left on the Table? Victor Haghani and James White, Elm Partners 10/15/2018) is a pretty good, succinct (short) cover of the annuity puzzle concept. It also introduces a little bit of the consumption utility idea, something covered here quite a bit recently.  There are a lot of ways of looking at this kind of thing but I like how they cover it here and also how they keep it simple, short and readable.  I also like the fact that they make the underappreciated point "bearing one’s own longevity risk does not offer compensation in the form of a risk-premium" along with the related, obvious but also underappreciated point that access to the longevity risk pool via annuities is something that one can't roll on one's own with any type of financial engineering.

For a little more depth on the type of model that might be used to evaluate consumption utility of different strategies over a forthcoming lifetime and the impact of annuitization on lifetime utility, one might look at two things I've done this year:

1. my Wealth Depletion Time EDULC (expected discounted utility of lifetime consumption) model

2. my post on partial annuitization, consumption utility and bequest

There are a bunch of other related posts but you'll find them listed in item 1.