Faculty Publications


Why Retirees Should Choose DIAs over SPIAs

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Retirement portfolios can be constructed from a mix of asset classes, including stocks, bonds and annuities. In the past, I’ve shown that retirees achieve some of the best outcomes by allocating a portion of those assets to single-premium immediate annuities (SPIAs). In this column, I extend my analysis to show that deferred-income annuities (DIAs) work even better than SPIAs, by providing more liquidity and better longevity protection at a lower cost.