This is the first of three podcasts leading up to the release of David's latest book, Tax-Free Income For Life. According to a number of surveys, the number one risk that retirees are most concerned about is outliving their money.

One of the ways to mitigate longevity risk is by having an annuity. There are a number of benefits that come with guaranteed lifetime income annuities, the first of which is retirement predictability.

The first benefit of a guaranteed lifetime income annuity is closing the income gap between the amount required above and beyond what is provided for by your social security and government pension. An annuity has the ability to completely mitigate longevity risk.

The second benefit is that people who have an annuity that can guarantee their income generally have considerably less anxiety and a higher level of happiness than those that don't. An annuity won't bring anxiety-free retirement but it will certainly be much less than those who have to rely on the stock market to achieve their retirement goals.

The third benefit may surprise you. With a guaranteed lifetime income annuity, you will likely live longer. Studies show, after adjusting for all other variables, people with annuities tend to live longer than their counterparts who don't have them.

The fourth benefit allows you to skirt around the 3% rule. While the 3% rule should generally work to ensure you never run out of money it tends to be a very expensive proposition. An annuity allows you to mitigate that risk with much less money. This can also free up more money to invest in the stock market.

The final benefit is that because of the ability to guarantee your income with less money than you would require otherwise, you can take a greater risk in your stock market portfolio and be more aggressive.

If the stock market goes down you are not going to be forced to take money out in a down year since you will have your living expenses guaranteed by your annuity. You will have the luxury of waiting for the stock market to recover in that scenario.

Most of the money that you are planning on spending on your discretionary expenses in retirement has not been earned yet when you retire. You must have the ability to stretch your stock market portfolio over a possible 30 year time frame which requires you to take more risk in your investments. When you guarantee your lifetime income, you have a permission slip to take more risk in the stock market.

A guaranteed lifetime income annuity also neutralizes two risks that have sent many retiree's portfolios into a death spiral. Namely sequence of return risk and withdrawal rate risk. This can prevent you from running out of money up to 12 to 15 years earlier than you expect.

You don't have to worry about taking unduly high distributions from your stock market portfolio if your income is provided by a different means like a guaranteed lifetime income annuity.