Cash vs. Annuitization
A prospective retiree's #1 concern is that she won't afford retirement or will outlive her available assets. In essence, this is the fear that the future income bucket won't be satisfied.
The most straightforward solution is to buy a lifetime immediate annuity at retirement. Unlike the other types of annuities, an immediate annuity's expense is very low, but still many retirees do not take actions to address this biggest concern. Why?
The reason is even she fears a shortfall in future income, she is not willing to give up the liquidity of current assets to secure it because having sufficient current assets is a required first foundation. In other words, it's not a fear of outliving money but a fear of outliving money available after having enough liquidity cash on hand to meet current expenses!
Thus, it's not surprise that if a retiree chooses annuitization, she strongly prefers partial annuitization option to all or nothing strategy because this has less of an impact on the current assets bucket.
Do you have such 3 mental buckets in your head?