The result of the study showed that only a few people choose to invest in annuities- a guaranteed steady stream of income during retirement. The lack of interest shown towards annuities was because it coerced people to think about how long they expect to live in order to calculate the potential payout for an annuity.

Thus, the findings, published online in the Journal of Consumer Psychology, proved that the fear of death tempts people to avoid making decisions about how to manage their savings during retirement.

"Our goal was to understand how we can help people overcome their avoidance of annuity products," said one of the study authors Linda Salisbury, professor at Boston College in Massachusetts, US.

However, the study also pointed out that apart from annuities the retirees may also be avoiding estate planning, wills and life insurance due to fear of death.

For the study, the team presented two groups with a hypothetical scenario in which they were 65 years old and beginning retirement. One group was asked if they were interested in putting their savings into an Individual Retirement Account (IRA), while the second group was asked if they were interested in an annuity.

After giving their responses, the participants in both groups talked about the thoughts they were having. The researchers found that 40 percent in the annuity group had death-related thoughts, compared to only one percent in the IRA group.

The investigators further tested their theory by asking participants in the first group to write an essay about their own death, such as how it would happen and the emotions involved.

 

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