Advisers like myself who have been recommending annuities for the last four years don't need a journalist to tell us how good they are; we have direct experience. Annuities are ideal for avoiding at least the following risks:
- Market risk- Your principal is- or can be, even with variable annuities -protected from downside risk.
- Inflation Risk- Stereotypically "safe" havens like CDs & bank savings accounts while FDIC insured nontheless guarantee that you will lose money due to inflation. The returns on these types of accounts have historically nearly always lagged behind inflation. Substantially. Several annuity lifetime income riders available can guarantee increasing income that will outpace inflation.
- Longevity risk- In the days when we only lived 5-7 years beyond retirement, this wasn't much of a risk. But now that we live 20 or even 30 years after retirement, the risk of running out of dough is substantial. Laddered annuity income riders can guarantee lifetime income.