Each successive generation is handily outliving the one before it. According to a Conference Board of Canada report on life expectancy, the average Canadian born in 2006 can expected to live to age 80.7 versus to age 71 if born in 1961.

Living longer raises a concern. Will you outlive your retirement income? You won't if you belong to a defined benefit pension plan.

An example is the Superannuation plan that federal and territorial employees belong to and which pays a guaranteed retirement income, indexed to inflation, for life. The rest of us might be a bit anxious after last year's bear market mauling that devastated the retirement prospects for many Canadians.

A sound retirement plan should provide for stable income you won't outlive; inflation protection; ability to access emergency cash and shelter from future market downturns. There are strategies to achieve these goals. The purpose of this article isn't to present those options, due to space constraint, but to consider an important criterion - not outliving your hard earned retirement nest egg.

You want some level of guaranteed income when you retire. In Canada, workers can count on the Canada Pension Plan benefit which pays up to $10,905 at age 65 (in 2009, indexed to inflation). There's the Old Age Security benefit of $6,203 (in 2009, indexed to inflation) provided you are age 65 or older and have lived in Canada for 40 years after age 18. While guaranteed, the CPP and OAS benefits won't support a comfortable retirement.

You are likely too petrified to trust the roller coaster stock market to deliver dependable retirement income.

Putting 100 per cent of your retirement funds into Guaranteed Investment Certificates (GIC) isn't a complete solution either.

While GICs deliver safety; the dismal returns on GICs might not produce sufficient income for retirement.

Maybe its time you consider an annuity to provide you with guaranteed retirement income. An annuity is an investment where, in exchange for a lump sum payment upfront, you receive a regular income for the rest of your life. Let's see if an annuity has a place in your retirement planning.

Say you are a male, age 65, and have a nest egg of $100,000. Purchasing a life annuity with the $100,000 currently pays about $675 per month, or $8,100 annually, for life.

By comparison, if you stuck that $100,000 into a GIC earning 4 per cent per year and withdrew $8,100 annually, you'll run out of money at age 82. The numbers do make a case for considering an annuity because the Organization for Economic Co-operation and Development's 2009 health data projects that a 65-year-old Canadian male is expected to live to age 83.

Note: mathematical scenarios are only as reliable as the underlying assumptions. In the one above, a 4 per cent return on a GIC over a 17 year span is assumed to be reasonable. If you expect GIC rates to be less than 4 per cent or you expect to live past age 82, purchasing an annuity is a clear choice from a mathematically perspective.

There are disadvantages with an annuity. There is no going back; once you hand over the cash, it's gone. In return you are entitled to the monthly income. The monthly payments are fixed and aren't inflation protected.

If you have a reasonable retirement nest egg, allocating a portion towards an annuity will supplement your lifelong CPP and OAS benefits and bolster the amount of your guaranteed monthly income. The rest could be allocated to higher-risk, higher-reward investments to add some growth.

Google 'Annuity' for more information on this investment option.