If you want an annuity that is straightforward and simple — i.e., unencumbered by the likes of fees or so-called riders (a provision that provides additional benefits for additional cost) — you could do a lot worse than a fixed annuity. It typically pays more than a bank CD, likewise offers a guaranteed interest rate and, most important to some people, provides absolute certainty about exactly what you will get and for how long.
There is something to be said for this, notwithstanding the fact that a fixed-income annuity sometimes doesn’t keep pace with inflation. This has never stopped people from buying popular bank CDs and, in fact, lots of folks worry only about losing money — something that can easily happen with market investments.
In short, they believe inflationary consequences are worth the price of admission, especially in an ultra-low-inflation era that shows no signs of abating.
