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March 23, 2023 at 01:22 PM
Bundling income annuities with reverse mortgages could increase consumer use of annuities, according to two economists.
The researchers, Pierre-Carl Michaud and Pascal St. Amour, make that suggestion in a new working paper about why consumers skimp on buying retirement planning products that look great to economists.
The researchers found that offering access to annuities through a reverse mortgage-based program pushed up the estimated takeup rate for annuities to 33%, from 10%.
What It Means
Scientific research supports the idea that offering retirement-related products alongside other retirement-related products changes how consumers see the products.
The Research
Michaud is an economist at HEC Montréal, a business school in Quebec, and St. Amour is an economist at the University of Lausanne, in Switzerland.
A working paper is a research paper that has not yet gone through a full peer review process.
Michaud and St. Amour used Asking Canadians, an online survey program, to look at how Canadian consumers ages 60 through 70 see long-term care insurance, annuities and reverse mortgages. They received 3,057 completed questionnaires.
