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Originally Posted by dewilson58
Essentially, you’re betting the insurance company that you’re going to live longer than they think you will. They take your money, invest it and give it back to you in dribs and drabs (with steep penalties if you want to withdraw more than the contract states).
Annuities are such terrible investments that the minute the government passed a law specifying that financial professionals had to act in their clients best interest, annuity sales fell off a cliff.
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That is totally incorrect. You are not betting anything with the insurance company. This is like saying you are betting the insurance company you won't crash when you buy car insurance. Annuities are based on life expectancy averages. If anything you are bettting all the other people buying the same annuity contract that you will live longer than the AVERAGE life expectancy. They are called mortality credits... the people who die early pay for the people who die later. Basically the opposite of life insurance.
Basically - they are longevity insurance, and insurance costs money. They are NOT investments. So you are wrong twice.
There are horrible mutual funds out there but you don't condemn all mutual funds do you? Why would you condemn a tool that helps a lot of people because there are a few bad ones, and a lot of bad sales people? Just stupid.
On top of it, having gauranteed income makes you happier and live longer - and here is my reference, unlike your unsubstantiated claims.
Retirees with a Guaranteed Income Are Happier, Live Longer | Kiplinger
Annuities can be part of a solid retirement plan, people should take an unbiased look - and I have never sold one, I just own a few as part of mine, and happy I do.