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[quote=Anonymous][quote=Anonymous]Simple annuities are great for their purpose. Such investments are not meant to compete with stocks for big returns. Instead, you should view them as a bond alternative that provides a secure stream of income for a designated period or life. There are a lot of people with “just enough” funds to retire, but are scared sh*tless about the next market swoon. These people may be better off taking their bond allocation and making it an annuity while letting their stock portion continue to grow. Besides worry-free income, the annuity allows the investor to consume more early in retirement because they’re not worried about adverse market movements and benefit again if they live past the average mortality, which is used to price the annuity. Annuities see essentially government-secured because of their state insurance fund guarantee. If you compare current simple annuity rates to Treasuries, they’re competitive. [/quote]

+1  The knee jerk reaction against annuities is wrong (though the annuity 'industry' has a lot of flaws). I think one of the best ways to use them is if you don't have a pension to look at your social security income and your most basic needs in retirement.  If there's a gap, get an immediate annuity that will fill that gap.   That way you know no matter what happens to your portfolio you won't be out on the street. Immediate annuities (SPIA mentioned earlier) are not high fee complex products.  You can get them through Vanguard.  The biggest risk is that you die before you get their full value; their biggest value is if you live longer than they expected you to. Also, like above pp, this 'peace of mind' often frees people to have a little more confidence in investing their portfolios that will grow and beat inflation at least.[/quote]

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