Why Retirees Should Choose DIAs over SPIAs
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.
Pfau, Wade, "Why Retirees Should Choose DIAs over SPIAs" (2013). Faculty Publications. 137.