Our annuities are the best horrible investments we have made for a more secure retirement.

There are many different types of annuities but I can only speak for the ones that we purchased.

Annuities usually have two sides, the cash value side which as stated above is an absolutely horrible investment in our case, and the guaranteed income side as shown in this table which is the primary reason for the purchase of most annuities.

The cash value side of our annuity got an 8% bonus in year one, but also has withdraw penalties for the first 10 years. There are annual fees charged to this side of the policy and the possible interest income is low and difficult to achieve, basically it is as bad or worse than a 0.1% bank CD.

The annuity side of the investment also gave us an upfront 8% bonus and is guaranteed to grow by 7% per year. If you couple that growth with the annual increase in the conversion rate, the annuity pay out grows by about 9% per year for each year you wait to start your guaranteed income stream.

After you start your annual annuity payments, the payments are taken from the cash value side which is also your death benefit. If you start your annuity before the age of 70 your death benefits will expire around age 76 to 78 but your annual annuity payments will continue for the remainder of your life.

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