Mark Hulbert on Fixed Annuities

Mark Hulbert is the author of the Hulbert Financial Digest, a popular monthly newsletter that tracks the investment performance of roughly 180 different investing-related newsletters.

Hulbert wrote an article on fixed annuities in the business section of the New York Times.

In a balanced and informative piece, Hulbert touches on topics that include the following:

  • Annuities and the financial crisis.
  • Annuities in the current interest rate environment.
  • How effective fixed annuities are in addressing longevity risk.
  • The performance of fixed annuities relative to alternative approaches--including Treasuries.
  • Recognition of the value of fixed annuities within academia.
  • The pros and cons of fixed annuities relative to other annuity types.

Source: New York Times

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I also read the article in the Times.

Trying to understand why so many academics and other industry observers seem to have a bias towards fixed annuities (compared to other flavors of annuity).


Hulbert seems to think that fixed annuities are the best way to address longevity risk.

Would seem to me that there are many other ways that are as effective or even more effective at dealing with longevity risk--including longevity annuities.

See my related comment on the "fixed annuity bias" thread.

I agree that many observers/commentators make the mistake of thinking that other annuity types such as variable annuities are not effective in addressing longevity risk.

This is obviously not the case--particularly in light of recent product developments and innovations.

The longevity annuity is a clear innovation and alternative for addressing longevity risk--probably the most efficient way to mitigate the risk of outliving assets.