Why are annuities considered poor investments?

Annuities are considered poor investments for many reasons. Depending on the annuity, these include a variety of high fees, with little to no interest earned, an inability to keep up with inflation, and limited liquidity. What Is Better Than an Annuity for Retirement?

What are the drawbacks of annuities?

Cost is one of the biggest drawbacks of annuities. Expenses erode the owner’s returns, especially on a variable annuity where the value depends on the investment returns. Some annuity contracts are so complex that the full rate of the internal expenses is hard for the average person to understand.

Do annuities work?

Annuities work for people who are looking for simple, fixed payments—and who don't mind the disadvantages, such as high fees. When considering an annuity, make sure to pay attention to all of the details in the contract. Evaluate all of the pros and the cons.