Lifetime Annuity Defined - a periodic income payment (e.g. monthly, quarterly, annually) which lasts as long as you live, or which you cannot outlive.

To interject a little humor into an otherwise sober topic,  I can envision David Letterman compiling the list below:

TOP TEN REASONS YOU DON’T NEED A LIFETIME ANNUITY

10.  You still live at home and your parents have yet to cut-off your allowance annuity.

 9.    You grow your own food, make your own clothes, and barter for other needs.

 8.    You have extremely successful adult children who gave you a platinum American Express card for Christmas with a $100,000 credit limit.

 7.    You worked in Congress for a year and are now guaranteed that salary for the rest of your life.

 6.    Your closest friends refer to you as “The Donald.”

 5.    Your new money manager has promised you that everything is back to “normal” and he will earn you 8% annually, after inflation, for as long as you live.

 4.    You just received a life sentence without parole and feel confident in the stability of our prison system.

 3.    Your trust fund could feed a small country.

 2.    You live in a warm area, wear shorts and flip flops, eat wild nuts and berries and know you can live on Social Security’s after-tax $12,000/year.

AND, THE NUMBER ONE REASON YOU DON’T NEED A LIFETIME ANNUITY

1. You thought money trees were a joke until you found one in your back yard!!

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 While intended for a laugh, I have to close this piece by stating that nothing, of which I am aware, except for guaranteed lifetime annuities can financially manage, what I call, the four great unknowns:  (1) how long you will live; (2) rate of return on your savings; (3) future inflation rate; and, (4) unexpected market disruptions (e.g. the fall of 2008).  IF your retirement savings sit in today’s financial markets, CDs or under your mattress – ask yourself whether you’ve covered the above four issues.