Longevity Risk

The risk of outliving one's assets. In other words, the risk of running out of money during retirement. In most countries, average life expectancy has increased dramatically over the past several decades. Longer lifespans are somewhat of a mixed blessing because of the financial burden associated with more years of retirement. Individuals, insurance companies and governments are exposed to the financial pressures created by the need to finance increasing longevity. Longevity risk is a key challenge for many societies around the world.

I am in my 30s -- is there any reason I would buy an annuity now? My advisor has suggested it.