I have never been a fan of annuities. The plain and simple truth to this belief rest on the fact that an insurance company should not be involved in your retirement future, past or present. These businesses do have a role in protecting you from unforeseen problems and the possibility of those issue delivering a financial blow that could derail your plans. Insure your life, your house, your car. But insure your retirement?
First, an annuity is as I wrote, an insurance product with an investment aspect that offers to mask the true identity of what it is. Now annuities have been gaining traction in the retirement discussion as a way to guarantee a lifetime income for those who feel as though they may run out of cash. Just like every guarantee you are offered (on many items that at the time would be too expensive to repair on replace), the cost is built into the offer. In other words, you are paying upfront for something that you may never use.