What to do with the money in your pension account is a question that deeply concerns everyone who has to provide for his or her own retirement. I've had a lot of letters recently from insurance agents who think I've been unfairly slighting annuities in favor of bank or savings and loan accounts, mutual funds and government bonds.

The agents concede that annuities don't build as much savings as other vehicles.

Their main point is that with an annuity you won't outlive your income. As one agent put it, "It's not the accumulation of savings that count, it's the distribution - how long you can get income when you retire." For this reason, they think a working person should start right now to accumulate money in an annuity that will "last him a lifetime."

I agree that many retirees worry about outliving their income. But the answer to that problem is to buy an annuity at retirement.Why buy it when you're still in your thirties and forties, and trying to save money for your later years? Why accept a lower rate of savings buildup?

If your goal is maximum retirement income, it is the accumulation of savings that counts, with all due respect to insurance agents who think otherwise. The more you save, the more you'll have to retire on - and the more you're likely to get from an annuity when you finally buy one.

Here's what I mean:

Say you put $1,000 a year into an Individual Retirement Account at a savings and loan, paying 7 3/4 per cent compounded daily and assume that current interest rates don't change. You'd have $126,000 after 30 years.

If you put that same $1,000 into an IRA annuity at Prudential Life Insurance Co. of America, which now pays 7 1/2 per cent, you'd have about $105,000 after 30 years. (The main reason for that big a difference in savings is that the S&L charges no fee for an IRA account, while the insurance company charges a sales commission.) Other insurance companies might project higher or lower payouts than Prudential's but they are not likely to come up to the savings accumulated by a bank or S&L.

Now, assume that at age 65 you decide you want a lifetime annuity with payments guaranteed for ten years even if you die sooner. For a man, the $105,000 saved in a Prudential IRA account would produce an annual lifetime income of $10,307 before taxes. This amount could fluctuate upward or downward depending on interest trends, but in no case could drop below $7,912 a year.

If you'd saved via an S&L account, your $126,000 (after paying a $250 policy fee and a 1 1/2 per cent commission) would give a guaranteed annual income of $13,850 before taxes.

So you'd still have a lifetime income, but because of the higher accumulation in the S&L account the income is larger than it would have been otherwise.

The big difference in income is party due to the high level of current interest rates. Income derived from an IRA annuity results from averaging interest rates over several years, while income from a single-purchase annuity at age 65 reflects current interest rates, according to Elwin Lacher, Prudential's vice president for pensions. As interest rates decline, so will annuity purchase rates. But interest rates would have to stay low for a long time before an IRA annuity had even a chance of producing more retirement income than a lifetime of savings in an S&L.

There are, however, two angles to an annuity you might want to weigh:

First, many companies (but not all) will sell you a disability waiver. That means that if you ever become totally disabled and aren't earning any income, the insurance company will make your annual payment for you. The waiver doesn't cost much because the odds of your becoming totally disabled are very low. Whether having a disability waiver is worth a sacrifice in retirement income is something only you can decide. (If disability does strike, you might have to take the money out of your IRA anyway.)

Second, insurance companies offer current annuity buyers a minumum guaranteed rate of monthly income at retirement. If you wait 30 years to get your annuity, you'll buy at the rate then in effect with no minimum guarantees.

Is it worther buying now, just to get the guarantee? There's no way to know for sure. The guaranteed rate, however, is quite low - well below the rate at which annuities currently are sold. Interest rates would have to fall and stay low for a long time before the income payout on a new annuity would fall below today's guaranteed rate.

So that's the fundamental comparison between annuities and savings accounts, but a question that's just aspertinent is whether a person saving for retiremet wants to put all his money in either.

A healthy part of your long-term savings might better be in a vehicle with more potential for growth, which for IRA investors means a retirement account with a good no-load mutual fund group.