Are Annuities Good or Bad?

An annuity is like any tool. When you use the proper tool for the purpose it was designed for, you usually get the desired result.

You may have heard people say annuities are bad, and you may have heard other people tell you annuities are good. The question is, who’s right?

Think of an annuity as a tool. It’s like a screwdriver, a hammer, a stethoscope, or a scalpel. Just like any tool, annuities have a purpose. When you use the proper tool for the purpose it was designed for, you usually get the desired result. Conversely, when you use a tool for something it was not designed for, you generally don’t get the desired result. It’s really that simple.

If someone tells you that annuities are bad, it’s like saying any other tool is bad. Either they don’t know what they’re talking about, or they have a hidden agenda. Almost every negative article I've ever read about annuities was written by someone who sells some other investment product. When you read a negative article, check out what the author does for a living, you'll see he or she is really selling something else.

The truth is, for some people annuities are the right tool, and for others it's the wrong tool. Here are a few instances of how annuities may be the right tool or the wrong tool to use.

  • Annuities are great tools if you want to protect your money from market losses.
  • Annuities are great tools if you want to create a lifetime income stream that you cannot outlive.
  • Annuities are NOT a great tool if you need quick and easy access to your money, and in those cases are probably not be the right tool for you.

My wife and I personally own two annuities. She needed to roll over two different 401(k)s into an IRA. Our goal was to have her IRA money grow over the long-term, without the risk of market loss, and an indexed annuity was the ideal tool.

If you have questions send an email to last thing, I have a special invitation for you.On Wednesday, March 30, 8 pm Eastern/5 pm Pacific, my friends at Next Generation Trust Services are presenting a live webinar on self-directed IRAs. I’ll be on the webinar too, talking about the Seven Retirement Killers. We’ll have a live open question and answer period, and you can ask me any question about retirement you like. It’ll be a great opportunity for us to interact together in a live open forum. You can register right here at the bottom of this page.In the meantime, check out and “LIKE” The Alemian File Facebook page, or simply go to, make sure you come back here next week to Physician’s Money Digest for another edition of The Alemian File.Please register for “How to Avoid the 7 Retirement Killers Webinar” and Self-directed IRAs on March 30, 8 pm Eastern/5 pm Pacific.Click on the link to register: