Defined terms for the annuity market and lifetime income landscape.
Tail risk is the exposure to extreme outcomes — events out in the tail of a probability distribution — that, while individually rare, can dominate the overall result for an individual or institution exposed to them.
A target date fund is a diversified investment vehicle whose asset allocation shifts automatically from a higher-equity mix toward a lower-equity mix as the fund approaches a specified target retirement year, and is the dominant QDIA in the defined contribution plan market.
Tax deferral is the postponement of federal income tax on the earnings inside an annuity contract, with tax deferred until distributions are taken from the contract.
