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  • Maurice Wilson

Why annuities aren't good for retirement anymore

Updated: Mar 18

As current and future generations continue to redefine retirement they will start to realize annuities aren't the answer.

Advances in health, wellness, and nutrition are leading the current generation of retirees to reconsider what is possible in life after work. No longer resigned to simply sit on the porch and watch the sun set, today's retirees are the most active in history. The financial requirements of this new retirement make annuities less of a fit than they have been in the past. Here are three reasons annuities aren't good for retirement anymore.


1. Retirees are living a lot longer

60 is the new 50 and active retirements have replaced the notion of spending your post-career years in a rocking chair. Today’s retirees are healthier, have access to the most advanced medicine in history, and a mindset that’s not saddled with traditional views about how grandma and granddad should  be spending their time. All of this has led to a growing expectation that people will spend as many years in retirement as they did in the office. This means more of a retiree’s portfolio will need to be working longer in the stock market instead of an insurance product that is designed to protect money – not grow it.


2. It’s not just them anymore

Extended families are becoming the norm again in America. This means retirees may be taking care of a parent, helping an adult child get settled, or sowing seeds in the grandkids’ college fund. Retirees will need full access to their money without the withdrawal limitations and surrender penalties insurance companies place on annuity owners. Furthermore, they will need their money to work harder than is possible when an insurance company controls it.


3. Retirees want more freedom

Most of our lives we have to follow rules set by our parents, bosses, and superiors. We acknowledge that we have to trade our time for the money required to achieve our life goals. However, in retirement we are in complete control of our time and money. Yet some retirees feel the need to cede some control of their money in exchange for safety. This seems like a good deal at first.

However, as we spend more time in retirement, the knowledge that some large company is telling us when and how much of our money we can use begins to feel limiting.

Immaterial of age who wants to be told they can only use 10% of their money? You earned it after all, you should be free (and trusted) to use some or all of it as you please.

But what about all the things an annuity provides?

Safety and a guaranteed return are some of the benefits of owning an annuity. However, these come at the cost of potential growth and total access to your money – not to mention the headaches that come should you decide to establish a legacy with assets in an annuity.

There is an alternative to annuities. One that offers safety of principal without sacrificing full access to your money, potential tax benefits that annuities can’t match, and most importantly one that allows you to take the appropriate amount of risk when faced with the very real possibility that you will spend as many years in retirement as you did in the workforce.

Contact us

If you think it’s smart to have more options in retirement than less. If you believe there is a smart way to achieve safety and growth in retirement without signing a contract that restricts when you can access all your money. Or if you simply want to learn about smart things to do with your money in retirement. Then it behooves you to contact us at and put "Smart Portfolio" in the subject line or visit us at

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