Maybe so according to Arnold Kling’s askblog, who argues that annuities are not very helpful for many people.
Economists think that old people who do not annuitize their wealth are dumb. I decided a long time ago that it is the economists who are dumb.
Old people face many risks other than the risk of living longer than average. Many risks give rise to needing to spend a lot of money at once. You might develop an illness that is treatable but very expensive to deal with. You might find that you have grandchildren living in a different city, and while you are still relatively healthy you want to visit a lot or even pick up and move there.
The risk of excess longevity is one that you can transfer to your children. That is, you might plan to leave $250 K to your children if you die at age 85, but you leave them nothing if you die at age 95.
HT: Marginal Revolution.