We have met with a number of local financial advisers. A concern that I have had with them was the predominance that annuities (variable and/or indexed) played in their recommended portfolios. Some wanted to put up almost all of my portfolio in them.
From my external reading as well as my own analysis, annuities are not always the best way to invest money. From a high-level view, they are very attractive with their guarantees and ability to withstand market downturns. However, I have yet to find an annuity that does a good job in protecting against inflation. It seems that with all of them, once you start withdrawing money, it is very difficult for them to ever ratchet up so that the withdrawal will increase with inflation. Over a 20 or 30 year horizon, this can be quite devastating to one's income.
Perhaps annuities can play a supporting role in a portfolio, but I will feel more comfortable with an adviser who uses them as such, rather than the dominant role that most advisers around here are pushing (at least the ones that we have met with).
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