In the NYT, Christopher Farrell writes,
“I don’t have an annuity and don’t plan to buy an annuity,” said Meir Statman, a finance professor at Santa Clara University. “I am sufficiently responsible and have enough self-control that I can moderate my consumption around my circumstances.”
Farrell also quotes me in the piece, as well as a paper by Reichling and Smetters that I cited.
Social Security is touted as an awesome annuity with no discussion of the riskiness therein, and theres no real mention of life contingencies in the article. A super healthy 60 year old will be subsidized in their 40 years of payout by all of the less healthy. There are certainly drawbacks to annuities, including fees and expenses charged, but the decision is a little more nuanced than the Times leads us to believe.
The NYT citing Arnold Kling? Does this signal the end of the world?