Excerpt: Two common explanations for the dearth of voluntary annuitization are bequest motives and liquidity demand .... Whenever costs prevent full annuitization, we demonstrate that efficient annuity allocations concentrate annuity-funded consumption late in life. This implies traditional immediate payout annuities are inefficient relative to recently introduced 'delayed payout annuities' which have survival-contingent payments beginning years after purchase. [WP2007-09]  MORE >>