One of the themes that have emerged from the many academic papers I've reviewed over the years is that economists think highly of immediate annuities. Clients, however, are not buying these products.

Why can one group love a product the other apparently hates? To answer that in just one word, I would choose "perspective." Economists and clients come at the issue from entirely different viewpoints. Academics typically examine macroeconomic and social issues, while clients are more interested in the microeconomics of their households.

And yet a number of trends will likely make lifetime income annuities more attractive, economists say. The most obvious of these is longer life expectancies. A 2006 Congressional Research Service (CRS) report to Congress indicated that the life expectancy of a newborn in the United States in 1900 was 49.2 years. The 2003 newborn, by contrast, is expected to live to 77.5 years old on average. This significant increase is attributable to advances in nutrition, medicine, environmental sciences, workplace safety regulations and other factors.

There is great debate within the academic community about whether we will see such dramatic life-expectancy increases in the 21st century. The rate of increase slowed significantly in the latter half of the 20th century. According to Stephen Goss, the chief actuary of the Social Security Administration referenced in the CRS report, the emergence of AIDS and SARS shows how quickly new diseases and antibiotic-resistant microbes can rise. Goss also asserts that medical advances may not be affordable for the masses and that the population in the U.S. has a tremendous problem with obesity and inadequate exercise.

Nonetheless, most of the research by far points to longer life expectancies, and lifetime income annuities provide a high degree of certainty that some income will be available, regardless of a person's life span.

Economists also cite the trend of fewer defined benefit pension plans and more defined contribution plans. My grandfather worked for the Chicago Transit Authority his entire adult life. Before he died, he collected a steady pension check for nearly 30 years in his retirement. These days, it is harder to find either a lifetime employee or a defined benefit plan.

The trend away from defined benefit to defined contribution plans has been under way for 30 years, but the pace of the shift appears to have accelerated substantially in recent years. A study by the benefits consulting firm Towers Watson showed that a mere 13 companies in the 2011 Fortune 100 offered their new hires a traditional defined benefit plan in 2011, while 58 companies did in 2000. And while 72 of the Fortune 100 maintained a defined benefit plan in the year 2000, only 30 of the firms on the 2011 list keep one. These plans are even rarer among small businesses, where the majority of Americans work.

With the increasing amount of responsibility placed upon individual workers comes great concern about their lack of financial literacy. Most of our personal finance education comes piecemeal from friends, family and the school of hard knocks. Personal finance information is typically sprinkled onto more traditional academic topics. For instance, schools in my community teach compounding interest as a math problem, but ignore the implications on someone's personal finances.

Meanwhile, the financial world has become more complex, and will likely become more so. I recently received notice that my home owner's insurance premiums were increasing 27%. As I reviewed information from my agent about alternative policies, I was reminded of just how difficult it can be to sort through one's financial matters. I am a highly trained professional with more than 20 years' experience who is familiar with financial terminology, yet it took almost no time for the whole matter to induce a raging headache.

Study after study about the utilization of 401(k) plans show unequivocally that most Americans are not saving enough and not taking full advantage of matching funds offered by their employers. Over time, the likely effect of this will be a population of workers with relatively small nest eggs.

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