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The risks: Without a secure income plan, your retirement accounts can face sequence-of-returns risk when balances suffer loss prior to stepping into retirement. That becomes even further magnified by point-in-time risk, because when the market drops, so do retirement savings. By systematically purchasing your future income over time, you’re more likely to avoid these risks, as well as a lower interest rate (and income), which often occurs with a one-and-done purchase.

Psychological benefits: At the same time, by building up your income over the years, you’re creating more financial confidence and peace of mind for yourself. It can feel more feasible to gradually buy a guaranteed income solution, versus cashing out and "annuitizing" a full account balance in your mid-60s.

A strategy worth considering: You may have thought about dollar-cost averaging into the market, but it can be utilized as a guaranteed, pre-retirement income as well. Keep in mind, this article is narrowly focused on one specific type of annuity (the SPIA), which is one of the least leveraged annuity products available. There are other product types that could make more sense for your situation, but the idea is still thought-provoking.