An interesting study by Willis Towers Watson determined that having an annuity income source was a significant factor in retirement happiness. An annuity income might be provided by an old-fashioned pension, but many employees no longer have access to that kind of pension. The alternative for them would be to use personal savings or funds from a 401k to purchase an annuity from an insurance company. The study found that the presence of some sort of annuity income stream was a particularly significant factor in retirement happiness in households without a lot of retirement investments.
This leads to some interesting questions about when retirees should buy a private annuity.