https://www.advisorperspectives.com/art ... ur-clients
His primary criticisms were that life annuities mostly just return your own money to you, and that they guarantee you will have maximum exposure to inflation risk because most life annuities are not inflation-indexed and the ones that are are prohibitively expensive. I agree with him entirely.
Except that there's another thing to think about:
https://humbledollar.com/2018/11/taking-their-money/- Studies show that, as we age, our brain becomes less able to detect fraud. Changes occur in the region of the brain that helps us decide whether or not to trust someone.
- A majority of financial exploitation is carried out by people the victim knows.
- One study found that financial literacy declines by about 2% every year after age 60. Confidence in financial decision making, however, doesn’t decline with age. That combination—reduced ability but continued confidence—helps explain poor financial decisions by older adults.
In my father’s case, two things helped to lessen the impact of the money squandering. First... my father took his as a lifetime monthly pension. He could only give away what he had on hand, so the financial damage was limited to his past monthly pension payments, while his future distributions remained protected.
As a gift from my (relatively) younger self to my older, and likely senile, self I plan to annualize a large portion of my retirement assets even if annuities are a terrible idea. Ending up broke and demented seems like an even worse idea.