Registered index‐linked annuities in qualified retirement plans

Cameron Ellis, Thorsten Moenig and Jacqueline Volkman‐Wise

Journal of Risk & Insurance, 2025, vol. 92, issue 3, 665-691

Abstract: Many Americans remain financially underprepared for retirement. While automatic enrollment in employer‐sponsored retirement plans has helped, target‐date funds (TDFs) used as default investments have limitations. We propose target‐date registered index‐linked annuities (TD‐RILAs) as a transparent, cost‐effective alternative providing decreasing equity exposure over time. A theoretical analysis explores TD‐RILAs' optimal structure and compares them to TDFs. A lab experiment examines investors' preferences, product transparency, default choices, and the role of information. We find that TD‐RILAs are a suitable addition to retirement plans, potentially rivaling TDFs.

Date: 2025
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https://doi.org/10.1111/jori.12505

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Persistent link: https://EconPapers.repec.org/RePEc:bla:jrinsu:v:92:y:2025:i:3:p:665-691

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