A good question and answer piece from the Chicago Tribune.
The reader had just purchased a $400,000 immediate annuity at a relatively young age.
The purchase was also made from one insurer in a relatively low interest rate environment.
Having both a pension and Social Security (both are lifetime annuities), I would not have committed half my portfolio to an income annuity at the relatively young age of 63 and during a period of low interest rates.
It does not appear that the annuity came with inflation protection, and the term was only 15 years. The annuity was not joint and survivor so the spouse would not continue to benefit in the event that the policyholder passes away before the 15 year term is complete.
Source: Chicago Tribune
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