Annuities can be an affordable option. "In general, when compared to retail options, low-cost institutional retirement income solutions have the potential to increase retirement income by 10 percent to 20 percent," according to Lincoln Financial Group. "Offering in-plan, guaranteed lifetime income solutions allows participants to benefit from institutionally priced programs — and potentially higher incomes — throughout retirement."

Now may be a good time to invest. With interest rates as low as they are, now may be the most beneficial time to purchase an annuity, according to the Alliance for Lifetime Income. Annuities are the only income source guaranteed to pay out a retirement income for life.

Surviving family members are protected. Available plan features include joint-life annuities and the potential to add a 20-year guaranteed period to the annuity's payout. This means that even if the owner dies before the end of the 20-year period, heirs typically will receive at least the amount of principal invested to buy the annuity. Preselecting income to continue distributing to a spouse or partner after death can make it easier for the surviving individual, who may not have been involved in the couple's financial planning.

"The central role that annuities have played in securing guaranteed lifetime income for generations of Americans, including for defined benefit plan participants, has historically been misunderstood, mischaracterized and undervalued," the report concluded. "Only by risk pooling can a plan participant, not knowing how long they individually will live, feel safe receiving and spending a higher income amount than prominent academics say is a safe, non-guaranteed withdrawal rate in today's challenging market environment. Annuities are the only currently available commercial product that enables risk pooling."