How do annuities compare to other fixed income vehicles like CDs, bonds, and money market accounts?

Fixed annuities provide a guaranteed rate of return and payout amount, regardless of the purchase amount, stock market fluctuations, or life expectancy. Bonds offer income, but can lose value or be called by the issuer. Fixed annuities typically offer a higher rate of return than CDs, US bonds, or money market accounts. Investment risk in fixed annuities is also comparably low. Unlike fixed annuities, 401(k), ETFs and mutual funds bear a lot of stock market risks. Most other tax-efficient vehicles e.g. 401(k), IRA/Roth IRA, SEP IRA, have an annual limit on contribution amount, but annuities don't.","reminder":"\Reminder: While we classify CDs, bonds and money market accounts as low risk, that is not entirely true. For any of those three to be a good investment, interest rates have to be very high. While there have been periods of time with higher interest rates, more often than not, the risk-averse consumer is getting little or no return 'playing it safe.' It is far more productive to use an annuity which has no downside. The guaranteed rate of the Benefit Base side of an annuity will likely outperform the CD, bond or money market funds.