Sustaining Retirement during Lockdown: Annuitized Income and Older American’s Financial Well-Being before and during the COVID-19 Pandemic

Qi Sun () and Gary Curnutt
Additional contact information
Qi Sun: Pacific Life Insurance Company, Newport Beach, CA 92660, USA
Gary Curnutt: The School of Accounting, Finance, Information Systems and Business Law, College of Business, Western Carolina University, Cullowhee, NC 28723, USA

JRFM, 2023, vol. 16, issue 10, 1-13

Abstract: The landscape of employer-sponsored retirement plans in the U.S. has changed dramatically during the past few decades as more and more private-sector employers have decided to freeze or terminate traditional pension plans. Defined contribution (DC) plans became the primary choice or the only choice for employees to participate in employer-sponsored retirement plans. In the next ten to twenty years, the income from pension plans will only count for a third of the total retirement income for GenXers when compared to their baby boomer counterparts. It is important for research to provide evidence on how the change in retirement income resources impacts retirees’ retirement security and financial wellness. Using Health and Retirement Study (HRS) data before and during the COVID-19 pandemic, this study examines the association between annuitized income and various measures of older Americans’ financial well-being over time, particularly during the pandemic. This study finds that receiving annuitized income has a statistically significant relationship with reduced subjective financial well-being for both measurements, while only one of the measures of objective well-being, having liquid assets greater than the median household income, has a statistically significant positive relationship with receiving annuitized income.

Keywords: financial well-being; longevity risk; annuitized income; defined contribution plans (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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