In a TV interview, an elderly person said that a life annuity locks up his money. He prefers to keep the money in an account, so that he has the flexibility to use it to meet special needs.
Here are my views.
1. You can aim for flexibility, if you have more than adequate funds to last beyond your lifetime.
2. If you have limited savings, it is important that your limited funds be spread throughout your lifetime. This can be done through a life annuity.
3. If you spend your lifetime savings too quickly or make some bad investments, you may deplete your savings and have nothing left to live on.
4. With limited savings, you should use 80% to buy a life annuity and keep the remaining 20% as a flexible source of money to drawn down for your special needs.
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