I have been a participant in the Annuity Board's 403(b) plan for a number of years.  I am now nearing retirement and am trying to decide whether to "annuitize" my savings or leave them as is and take my chances with the market.  What advice could you give me?

Many retirement plans, including the 403(b) plan, offer these two options to their participants once they retire.  Making the choice can be a little unnerving, especially with the market's recent history.  Let's weigh both options.

"Annuitizing" your retirement would give you a steady stream of income for either your lifetime or the combined lifetimes of you and your spouse, whichever you choose.  The latter will give you a slightly smaller payout.  The payout you receive stays the same, so there is safety and predictability in this.  However, you don't have a hedge against inflation, so in later years, your inflation-adjusted income will be less.

Leaving your investments where they are allows you to adjust the amount you draw each year from your account.  You continue to choose the investment mix as you currently are doing.  Of course, you want to make sure you choose investments that match your situation.  The ideal scenario with this choice would be for the market growth to raise your income level through the years in order to keep up with inflation.  However, you take the risk that the market will go down, thus either reducing your income or depleting your investment.

Your best choice may be to consider taking both options, annuitizing half and leaving the other half in the market.  This would give you the best (and worst) of both worlds, without either completely locking in your income or taking too much risk with the market.