What's more, the stock market has been a hot mess for much of 2016, further stoking fears among many older Americans that they might someday fall short of their spending needs in retirement.
"It used to be that older investors could build fairly conservative portfolios and be confident that they would hit their retirement spending goals, but that is much more difficult today," said Jared Kizer, chief investment officer of Buckingham Asset Management and The BAM Alliance, thanks to interest rates being at historical lows.
The solution for some investors facing the prospect of running short of money during retirement might lie in an often misunderstood and somewhat maligned class of insurance products called annuities.
An annuity is essentially a contract with an insurance company that is funded by the buyer and designed to generate an income stream during retirement.
Like old-fashioned defined-benefit pension plans, some annuities guarantee buyers lifetime income — which might not only help retirees sleep better at night but also keep them from drawing down their portfolios too quickly or during a market rout, as well as allocating too little to stocks.