Should I use an annuity to cover my essential expenses in retirement?

Annuitizing just your essential expenses – housing, food, utilities, insurance, basic healthcare – is a popular middle-ground strategy sometimes called 'flooring.' The idea is to cover your non-negotiable costs with guaranteed lifetime income from Social Security, any pension, and possibly a simple immediate annuity, so a market crash can never threaten your basic standard of living. You then invest the rest of your portfolio for growth and discretionary spending like travel, with the freedom to take more risk because your floor is secure. This approach trades a bit of upside and liquidity for powerful peace of mind and protection against both market and longevity risk. If you go this route, favor plain, low-cost immediate annuities over complex variable or indexed products, and annuitize only enough to cover the true essentials, not everything.