Are there pros and cons when investing in annuities at age 60?

[won2many]

[Peter T]

Pro - you will have a secured income at pay out time. Either level amount for a fixed term or declining amount for indefinite term. Taxes will be deferred to pay-out date. Generally not subject to seizure.

Con - expensive if you plan to take the pay-out soon (less than 5 years) this also generally caps your investment profits at some basic rate.

[Bryan A]

definitely.

The major "pro" that insurance sales people tout is the building of tax-deferred income or the assurance of a set periodic income stream guaranteed for life.

But the "con" is (pun intended) you can usually (a) do investing on your own, paying attention to tax consequences, and still keep the investment income relatively low; (b) avoid the extensive surrender charges and itnernal feews built into nearly all annuities; (c) avoid locking in for life to an annuity that may lose value with inflation and taxes over time; and (d) have much more flexibility with your money.

Although occasionally they can be a benefit in certain limited circumstances, I try to avoid annuities for my clients.

[Steve B]

No pros exist. Your money will be locked up for several years with high surrender penalties. Although taxes are deferred, when you do pay taxes it will be at your ordinary income rate as opposed to the lower capital gains rate available with other investments.

Additionally, the fees involved are very high.

Don't do it.