Annuity salesmen often compare the benefits of their product with risks of stocks and bonds. They mention the hazards of securities markets and possibilities of market loss. But they often overlook the downside of what they offer.
Annuities have negatives and are not for everyone. They have an insurance factor which may not be required. And if not, why pay for it?
Then there are annuity management fees, contrary to sales pitches and early termination charges. Moreover, the strength of the company is always important to consider.
The choice of fixed or variable annuities further complicates the picture. Fixed annuities have set returns which means the buyer has no protection from any future inflation. Variable annuities tie into securities markets but not as directly as you may want. (See the Earl J Weinreb NewsHole® comments.)
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