With so few Americans having saved enough to see them through retirement, it’s a dilemma for planners and economists alike why people are so unattracted to annuities that can provide a source of income for life.

Indeed, according to a new working paper from the National Bureau of Economic Research, they can be a “valuable component” in retirement funding. But no matter how much economists believe that people should annuitize, “actual demand in the marketplace is low.”

And that’s a big problem, since approximately $9.2 trillion of retirement assets are held in defined contribution plans or IRAs and people are challenged by how quickly or slowly to draw on those assets, lest they run out of money and become impoverished — or, conversely, don’t spend enough and perhaps don’t have as comfortable or healthy a retirement as they could have.

Researchers found that “a relatively high percentage of respondents dislike all annuities.” But demographics don’t predict who will fall in that group, and even factors that appear to be important — such as beneficiaries — have effects that are either small or the opposite of what one might expect.

Such factors as life expectancy, an individual’s perception of fairness, ownership issues, loss aversion in addition to risk aversion and concerns about future health all weigh on an individual’s decision whether to annuitize or not.

(Related: Why Ken Fisher Hates Annuities)

While one might expect the risk averse and those who expect to live longer to be avid devotees of annuitization, such is not the case. With the money in the hands of the insurer, it’s not available to the owner in case of emergency or for bequests at their death. While companies have tried to compensate for that with new provisions, the higher prices of such products can be a turnoff. And the question of default risk on the part of the company isn’t a major factor in people’s decisions, either.

The study finds that the biggest indicator of how an individual will approach annuitization is their perception of product fairness. It also finds that individual preferences and prejudices are more important in the decumulation phase — retirement — than they are in the accumulation phase, when people are still saving. Advisors need to be aware of this and take extra pains with clients about decumulation decisions and the role annuities can play than perhaps they needed to when keeping clients on track to save for retirement.

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