When an Annuity May Make Sense in Retirement
After all of the talk about complex annuities, let’s be fair — some actually do what they’re supposed to do.
A plain fixed or immediate annuity can make sense when you want guaranteed income you can’t outlive.
It’s a simple trade: you give the insurance company a lump sum, and they send you a check every month for the rest of your life. No market risk. No guesswork.
That can be a huge comfort for someone without a pension or who’s nervous about market volatility.
It’s not about maximizing returns — it’s about creating stability.
Where confusion often arises is when annuities are evaluated like traditional growth investments.
They’re insurance contracts, not growth engines.
And once you’ve signed, you’re in for a while — surrender periods are long, and flexibility is limited.
The sweet spot is when an annuity fills a specific gap in your plan — like covering essential baseline expenses in retirement or providing guaranteed income for a surviving spouse.
As Fee-Only financial advisors, we don't sell these contracts or earn commissions if you buy one. That means when we help you evaluate whether a simple fixed or immediate annuity fits into your broader withdrawal strategy, you get unbiased analysis focused solely on your best interest.
Used thoughtfully, annuities can give peace of mind.
Used carelessly, they can tie up your money for decades.
The difference is the intention — and the objectivity — behind them.
