This paper conducts the ﬁrst empirical test of numerous rational and behavioral hypotheses for the low annuity demand observed in private markets. We designed a questionnaire based on ﬁndings from economics and psychology, enabling us to simultaneously investigate a broad range of motives that presumably constitute the reluctance to buy annuities. To address the interdependence of ﬁnancial product choice and domain-speciﬁc investor sophistication, we construct and employ a novel, comprehensive measure of ‘annuity literacy’. The results from a representative survey among German consumers reveal that both established rational and so far untested behavioral motives are signiﬁcant barriers to annuitize wealth. Furthermore, the overall level of annuity literacy is rather low, with most respondents lacking knowledge of an annuity’s core mechanics. These ﬁndings disclose promising directions for annuity suppliers, policy makers, and researchers towards resolving the annuity puzzle.