• It's possible to receive a lifetime income without using annuities.cash image by CraterValley Photo from Fotolia.com
  
  Annuities are wonderful products but not necessarily suitable for everyone's needs. Some people purchase annuities for the tax-sheltered growth. Some like the various investment options of variable annuities or the security of a guaranteed interest rate of the fixed annuity. Other people buy annuities for the lifetime of income they receive. You can use other products to provide the same benefits if you don't want to purchase an annuity.
  
  

Mutual Funds

• Consider mutual funds if you want to diversify your portfolio. Mutual funds are the investments in variable annuities. The disadvantage of these funds outside the annuity is that you pay taxes each year on any capital gain or distribution from the funds.
  
  

Asset Allocation

• Allocate your mutual funds to various types of investments for safety. Asset allocation involves using specific percentages of each type of investment based on your risk tolerance and age. Normally, one type of investment grows while others drop in value. As this happens, you rebalance the investments to the original percentages by selling the one that grew and purchasing more shares of the investment that dropped. By doing this, you always sell high and buy low to lock in your gain and provide more shares when the other investment grows.
  
  

CDs

• Banks offer fixed investments; these are investments where you get interest but the balance doesn't change. If you want the guarantees of a fixed annuity, these are one option. You pay taxes on the growth every year, however.
  
  

Tax-deferred or Tax-free Growth

• If you put your money in an IRA, you can use any investment. Traditional IRAs offer tax-deferred growth and a tax-deductible amount, too. Roth IRAs offer tax-free growth but no tax deduction. The drawback is that you are limited to the amount you invest. However, tax-free municipal bonds also give you tax-free growth and are an additional option from which to select.
  
  

Income

• Only annuitized annuities, ones where you take a lifetime income, offer an income you can't outlive. However, there are also viable alternatives. If you want a specific income every month, use mutual funds and sell off a specified dollar amount of the shares monthly. Work with the representative to find a specific percentage of growth to use for a hypothetical proposal. Use a low number such as 3 percent, just in case markets decline. Find out what monthly payment you could take without depleting your funds. Even though you might expect to live to 100, to be safe, use 110 as your life expectancy. Recalculate after several years and give yourself a raise if the funds do better than anticipated.
  
  

Interest Only

• If you don't mind a roller coaster income or simply want the income to supplement yours, use the interest-only option from a CD as a viable alternative to an annuity income. It will be less in the beginning because you receive some of your principal in the annuity payment. However, if interest rates rise dramatically, you might find your income larger than the original annuity proposed payment. During high interest rate times, reinvest some of the income so you have a cushion for low interest rate times.
  
  

Dividends

• While you might buy stocks for their appreciation value, people who want an income often purchase dividend-producing stocks and use the dividends for income. There's no guarantee that the company will always make a profit, but if they don't, you still have the value of the stocks. To increase your income, take only some of the dividends and use the automatic reinvestment option offered by many companies to purchase more stock. That way, even if dividends remain level, you'll get an increase in your income each year.