By Eric Henderson

COLUMBUS, Ohio (MainStreet) — The risk of outliving one’s retirement savings is growing. Increased life expectancies coupled with declines in the financial markets and home equity over the past few years have made it much more challenging for Americans to create adequate, lifelong income. In fact, the Employee Benefit Research Institute has found that nearly half (47%) of workers near retirement are predicted to run out of money and won’t be able to cover their basic expenses and uninsured health care costs.

To overcome these challenges, many are turning to annuities. In June, the Government Accountability Office issued a report advocating the use of immediate annuities to protect one’s retirement portfolio against underperforming investments, inflation and longevity risk. But how many Americans really understand annuities? What does one need to know?

Fear of outliving retirement savings has many turning to annuities, but these tools have pluses and minuses.