Bütler, MonikaMonikaBütlerStaubli, StefanStefanStaubli2023-04-132023-04-132011-06-01https://www.alexandria.unisg.ch/handle/20.500.14171/94045(with Kim Peijnenburg) überarbeitet und neu eingereicht "Review of Economic Dynamics" We analyze the effect of means-tested benefits on annuitization decisions. Most industrialized countries provide a subsistence level consumption floor in old age, usually in the form of means-tested benefits. The availability of such means-tested payments creates an incentive to cash out (occupational) pension wealth for low and middle income earners, instead of taking the annuity. Agents trade-off the advantages from annuitization, receiving the wealth-enhancing mortality credit, to the disadvantages, giving up "free" wealth in the form of means-tested supplemental benefits. We find that the availability of means-tested benefits can reduce the desired annuitization levels substantially. Using individual level data, we show that the model's predicted annuitization rates as a function of the level of pension wealth are roughly consistent with the cash-out patterns of occupational pension wealth observed in Switzerland.enmeans-tested benefitsoccupational pensionannuitylife-cycle modeldiscussion paper