Defined terms for the annuity market and lifetime income landscape.
Liquidity preference is the value an individual assigns to retaining direct access to and control over capital, which shapes the choice between arrangements that preserve capital access and those that convert capital into income.
Loss aversion is the tendency for individuals to weight losses more heavily than equivalent gains, so that avoiding a potential loss produces stronger motivation than pursuing a gain of the same size.
Mental accounting is the practice of treating money differently depending on where it is held, where it came from, or what it is intended for, rather than treating all resources as fungible.
Optimism bias is the tendency for individuals to expect favorable future outcomes at rates that exceed what past experience or base rates would support, and to expect unfavorable outcomes at rates lower than those references would support.
Overconfidence is the tendency for individuals to hold beliefs about their own knowledge, skill, or judgment that are more certain or more favorable than the underlying evidence supports.
