Author name: Charles Turner

Warren Buffett has been critical of most annuities, particularly those sold with high commissions and fees. He has argued that many annuities benefit the salespeople and insurance companies more than the buyer, since heavy fees erode returns over time. Buffett generally favors low-cost index funds over annuities for most investors, believing they offer better long-term

Dave Ramsey generally dislikes annuities, especially variable and indexed ones, for a few core reasons. First, high fees: many annuities carry hefty commissions, surrender charges, and management costs that eat into returns. Second, complexity: contracts often bury restrictive terms and penalties in fine print that buyers don’t fully understand. Third, mediocre returns: he argues that

Neither is universally better; they serve different goals. Annuities offer guaranteed, predictable income, often for life, and shift market risk to the insurer. In exchange, you typically give up liquidity, growth potential, and pay ongoing fees, which can be significant with variable or indexed annuities. Dividend stocks offer growth potential, liquidity, and historically have helped

Moving money from a 401(k) into an annuity is one of the more practical ways retirees convert a lump sum into guaranteed lifetime income. The IRS allows this kind of transfer, and if you do it correctly, you will not owe taxes or early withdrawal penalties on the money you move. The operative phrase is

When you’re building a retirement income plan, two options come up again and again: bonds and fixed indexed annuities (FIAs). Both are marketed as conservative, income-producing tools. But they work very differently, and in today’s rate environment, FIAs tend to offer a more practical combination of protection, growth potential, and guaranteed income than bonds alone.