Annuities have gotten a bad rap. Here's why Jean Chatzky likes them.

One of the toughest hurdles for retirees is working out how to pay themselves and then spending the money.

For decades, the pressure has been to save. When the time comes to start drawing on those funds, it can be paralyzing.

Personal finance expert Jean Chatzky has a solution: Use an annuity to provide a paycheck.

To annuitize essentially means to convert a lump sum portion of a retirement account into a contract that pays you a fixed monthly amount for a specified period or for the rest of your life.

The trouble is that annuities sold by insurance companies have a bad undertone for many people. They can be difficult to understand and typically come with a variety of fees. It's hard to know what the real cost is and what the penalties are if you need to tap the money for an emergency.

"There were a lot of people with a lot of criticisms about annuities, and these criticisms have started to change," Chatzky told Yahoo Finance. "It's only in the last decade that I have started to realize that [annuities] are yet another financial tool, like investments are financial tools, that have a valid place in the landscape."

Chatzky is the founder and CEO of HerMoney, a columnist for AARP, and a research fellow with the LIMRA Retirement Income Institute.

For her, the real selling point is that an annuity can function like a regular paycheck, providing the same sense of security.

"It's not the size, it's the frequency," Chatzky said.

Researchers have found at all levels of wealth that people who had their money in an annuity that sent them a paycheck typically spent twice as much as those relying on their own calculations about how much to pull from what account and when to pay themselves, according to Chatzky.

"They are able to spend because they know that there is another paycheck coming," she said. "This is as much of a mind game as it is a financial one."

Annuities are contracts between you and an insurance company. You give an insurance company a lump sum, and they provide a monthly check for a certain amount of time. That stream of income could start immediately or at a later date, lasting for a fixed period of time or until you die, depending on the terms.

The amount you get paid each month is calculated based on a variety of factors that include the amount you put into the annuity, your age, gender, and the current interest rate.

There are a few drawbacks. You cannot, typically, take refunds, so once you enter an annuity contract, you can't go back or change the amount you get each month. You can't name a beneficiary, which means that when you die, the income payments stop, though some insurers offer the option to add a spouse.