In the U.S., the monthly payments increase the longer one works—researchers have now examined whether delaying retirement is financially worthwhile.
- Earlier retirement: Researchers have analyzed data from the United States to examine whether retiring earlier is worthwhile.
- Findings: The study shows that the financial risk of delaying retirement particularly affects men and low-income groups in the U.S.
- Making the most of it: For sick individuals in the U.S., retiring early can help them receive some of the benefits they paid for—even if they do not have long to live.
The main difference is who bears the risk. For pensions, it’s the employer, who has to make extra payments if the pension fund falls behind it projected obligations, or surrender its management to PBGC. That open-ended risk is why most companies have abandoned pensions. For SS, it’s the government (although they do have the power to change their legal obligation). For annuities, it’s the recipient, who will just get less money if the annuity’s investments underperform during the accumulation phase.
To me, that’s a pretty big difference between each product.