It’s no secret that outliving your retirement savings is becoming an increasingly important financial consideration. Even though you may have been steadily saving, have you accumulated enough money to last for the unknown length of time you will be in retirement? According to the Web site www.overpopulation.com, studies indicate that with continued improvements in nutrition and medical treatment, human lifeexpectancy will continue rising, perhaps one day even approaching 150 or 200 years. Though people alive today won’t see that many candles on a birthday cake, can you afford to live for however long your life turns out to last?

Trying to take the guesswork out of how much to save for retirement isn’t easy. However, you can stack the deck in your favor by purchasing an annuity. An annuity is a financial product through which an insurance company pays you a predetermined monthly amount until you die in exchange for an initial investment by you.

There are numerous variations of the basic annuity contract, so you can easily find one to suit your particular financial situation.

If you have no heirs, you may want to consider purchasing a straight life annuity. This is an annuity contract through which you receive monthly payments until your death. If at the time of your death all of your savings used to purchase the annuity haven’t been paid out, the remaining portion stays with the insurer. Since these annuities make no further payments after your death, they offer a higher income stream than other types of annuities.

On the other hand, if you plan to leave the remainder of your savings to your children, you can purchase a period certain annuity. This contract also will provide you with lifetime monthly annuity payments. If you die within the pre-designated number of years following the date annuity payments began, payments will continue to be paid to your named beneficiaries for the remainder of the specified period.

Another alternative is the joint and survivor annuity, which covers both you and your spouse. As with the period certain annuity, the contract provides you with lifetime monthly annuity payments. After you die, your survivor continues to receive monthly payments. The amount the survivor receives will depend on the percentage you selected when you purchased the annuity. It may be 100%, 75%, 66 2/3%, or 50% of the amount of the payments made prior to the death.

Consult with an agent to help you understand both annuity terminology and exactly what an annuity can provide for you.

* Annuity withdrawals are generally taxed as ordinary income and may be subject to surrender charges, in addition to a 10% federal income tax penalty if made prior to age 59 1/2. The guarantees and payments of income are contingent on the claims paying ability of the issuing insurance carrier.

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