Longevity annuity... QLACs

[nun]

The criticism against annuities has always been their complexity and cost, so this is where QLACs win over many other annuities. I've always felt that most people going into retirement with just equity and bond mutual funds are under diversified and some insurance product or rental real estate would help in income planning. A QLAC offers a relatively inexpensive way of doing that and eases the "worry" of living too long

 

[BobbinChina]

Why not just wait until 70 to collect Social Security? That way you get a 24% increase in payment with COLA.

I'd suggest crunching the numbers. When I looked at it, deferring SS provided a much better return than buying a private SPIA.

Duh, describing it as a choice between one or the other might make sense for your specific circumstances, but it certainly does not make sense for most people's situations. DO BOTH ...but in any case, DO crunch the numbers and then you'll see what the real situation is likely to be!

 

[ETFs_Rule]

QLAC is just another fancy name for an annuity. Insurance companies are not playing Santa Claus. They are laughing all the way to the bank with Longevity Annuities too. No different.

 

[nun]

QLAC is just another fancy name for an annuity. Insurance companies are not playing Santa Claus. They are laughing all the way to the bank with Longevity Annuities too. No different.

QLACs have tax, cost and simplicity advantages over many other annuities. If you are ok betting that you'll live into your 90s you can get an IRR over 25 years of 5%. Is that worth it? A QLAC might make it easier for people to plan their withdrawal rates from other investments. There is no silver bullet in retirement planning and annuities might be appropriate for some retirees who worry about running out of money or who have a more liability matching outlook. As with everything keep costs to a minimum and know what you are buying and why you are buying it. Simply posting videos that trash annuities and push equity and bond mutual funds ignores that people's circumstances vary greatly.

 

[bmcgonig]

QLAC is just another fancy name for an annuity. Insurance companies are not playing Santa Claus. They are laughing all the way to the bank with Longevity Annuities too. No different.

The insurance companies aren't playing Santa Claus ..the people that die before you are.


Sent from my iPad using Early Retirement Forum

 

[nun]

The insurance companies aren't playing Santa Claus ..the people that die before you are.


Sent from my iPad using Early Retirement Forum

Yes, but the insurance companies are certainly making a nice bit of money off all the annuitants and in return you get some insurance. To compare an mutual fund with a QLAC is almost meaningless as they serve very different functions. That essential difference between a mutual fund and an annuity is one reason I would never buy a variable annuity. Own mutual funds for investment and annuities for insurance.

 

[kramer]

I plan to delay SS until 70 AND probably also do a QLAC within my traditional IRA. This will hopefully help reduce my RMDs throughout my 70's and early 80's. In the meantime, I will be spending down my taxable account so the QLAC RMDs in mid-80's and beyond will have less of a tax impact. In addition to greatly reducing my longevity risk.

Currently QLACs are not very cost competitive but hopefully, as more people use them and competition in the insurance place increases as a result, they will offer better value.

 

[nun]

I plan to delay SS until 70 AND probably also do a QLAC within my traditional IRA. This will hopefully help reduce my RMDs throughout my 70's and early 80's. In the meantime, I will be spending down my taxable account so the QLAC RMDs in mid-80's and beyond will have less of a tax impact. In addition to greatly reducing my longevity risk.

Currently QLACs are not very cost competitive but hopefully, as more people use them and competition in the insurance place increases as a result, they will offer better value.

I can actually see QLACs becoming a very common. Advisors and retirees will grab onto the backstop they provide and the RMD tax savings. The worry would be that people might try to take a too much income before the QLAC pays out or take on too much risk in their remaining portfolio. Of course whether people need a QLAC when all research shows that as we get older we spend less is arguable. Insuring against specific happenings like long term care might be better value. And you might want to insure against a market crash by shorting or buying an SPIA.....there's lots of different risks.

 

[fritz]

QLAC is just another fancy name for an annuity. Insurance companies are not playing Santa Claus. They are laughing all the way to the bank with Longevity Annuities too. No different.

I liked this guys video (thanks for posting it). I happen to be one of those that doesn't see much value in annuities- especially deferred (QLAC) annuities. However, SPIAs are something I would consider if I felt our projected income stream was threatened in the future as we age (lesser of two evils - running out of money or inflation risk).

Deferred Annuities (QLACs) appear to be getting some steam with the ability to be used within one's IRA. It also appears that they are more favored with insurance companies than retirees (wonder who pushed the Treasury to get favorable treatment done). The link below is Mike Kitces view of them from July 2014. It pretty much sums them up objectively. Can't say I would run out and by one...

https://www.kitces.com/blog/why-the...for-dont-mean-much-for-retirement-income-yet/

 

[hurricane harry]

QLAC is just another fancy name for an annuity. Insurance companies are not playing Santa Claus. They are laughing all the way to the bank with Longevity Annuities too. No different.

Annuities actually do work for some people, don't hate.

 

[nun]

Annuities actually do work for some people, don't hate.

I hate many annuities and lots if people have been ripped off by annuity sales people over the years. But QLACs are far simpler, cheaper and more regulated than other annuities so we shouldn't lump them in with variable annuities. If the "hate video" was specific to variable annuities I'd be 100% behind it, but it isn't and people should look at a range if income solutions including annuities for retirement income.

 

[BobbinChina]

I liked this guys video (thanks for posting it). I happen to be one of those that doesn't see much value in annuities- especially deferred (QLAC) annuities. However, SPIAs are something I would consider if I felt our projected income stream was threatened in the future as we age (lesser of two evils - running out of money or inflation risk).

Deferred Annuities (QLACs) appear to be getting some steam with the ability to be used within one's IRA. It also appears that they are more favored with insurance companies than retirees (wonder who pushed the Treasury to get favorable treatment done). The link below is Mike Kitces view of them from July 2014. It pretty much sums them up objectively. Can't say I would run out and by one...

https://www.kitces.com/blog/why-the...for-dont-mean-much-for-retirement-income-yet/

Well, as I said, I did buy one as soon as they hit the market which is only in the last couple of months. That's one of many errors int he Kitces paper on the subject. As a customer who's been studying the upcoming QLACs for a long time, I found his post to be well-written but just full of significant errors. Starting with the one about if it was so great, why hasn't anyone bought it yet....I've followed Treasury since 2012 so I do know that even after they finally approved this reg, then it was almost a year before the insurance companies came up with offerings. Like I said, tons of errors in his blog post.

 

[ETFs_Rule]

QLACs have tax, cost and simplicity advantages over many other annuities. If you are ok betting that you'll live into your 90s you can get an IRR over 25 years of 5%. Is that worth it? A QLAC might make it easier for people to plan their withdrawal rates from other investments. There is no silver bullet in retirement planning and annuities might be appropriate for some retirees who worry about running out of money or who have a more liability matching outlook. As with everything keep costs to a minimum and know what you are buying and why you are buying it. Simply posting videos that trash annuities and push equity and bond mutual funds ignores that people's circumstances vary greatly.

What tax advantages? Paying the HIGHER ordinary income tax rate? I don't consider that any "advantage". A separate account of bond/stock index funds is taxed at the normal capital gains tax rate. I'll take that ANY day!
Anything investing that involves an insurance contract is NOT going to have any kind of cost advantage. That's for sure!
These insurance products can be expected to return about 3% if you live long. I'm not talking about interest rate return. I'm talking about return on investment. As far as interest payment rate, these insurance products are fools gold, like the video explains. Eventually that fixed payment rate will stink!
You said "annuities might be appropriate for some retirees who worry about running out of money". Again, name for me a period in the past in which a conservative portfolio of bond and stock index funds would have run out of money. This didn't even happen if you started in 1969, the worst time in history to retire! You REALLY sound like an insurance salesman.

 

[nun]

What tax advantages? Paying the HIGHER ordinary income tax rate? I don't consider that any "advantage". A separate account of bond/stock index funds is taxed at the normal capital gains tax rate. I'll take that ANY day!

We are talking about tax deferred accounts and RMDs so capital gains don't come into it. If you want to reduce your RMD a QLAC will help with that. Now if you invest the RMDs you'll be paying capital gains and dividend tax rather than having the QLAC money grow tax free for say 20 years....of course lets hope you live that long.

Anything investing that involves an insurance contract is NOT going to have any kind of cost advantage. That's for sure!

I was comparing the costs of QLACs to variable annuities

These insurance products can be expected to return about 3% if you live long. I'm not talking about interest rate return. I'm talking about return on investment. As far as interest payment rate, these insurance products are fools gold, like the video explains. Eventually that fixed payment rate will stink!

For the example given in the first post the $50k invested at age 65 would have had to grow at 5% over the 26 years from 65 to 91 to provide the $27k income from age 85 to 91. That is not a fantastic return (but it is tax free compounding) and mortality credits make up a lot of it. But annuities are insurance, not investments. Immediate annuities online quote gives numbers the same as used in the article.

You said "annuities might be appropriate for some retirees who worry about running out of money". Again, name for me a period in the past in which a conservative portfolio of bond and stock index funds would have run out of money. This didn't even happen if you started in 1969, the worst time in history to retire! You REALLY sound like an insurance salesman.

You assume that everyone makes sensible decisions with their stock and bond portfolio and that the future will be at least as good as the past and that people want to live off a total return portfolio rather than something closer to a liability matching approach. A QLAC also firms up the time that the retiree needs to plan to withdraw from other investments, this might be attractive to some. Annuities are expensive (particularly variable and indexed varieties) and fixed ones without a COLA have poor returns today no matter how long you live, but sometimes people want insurance rather than investments.

 

[MooreBonds]

What tax advantages? Paying the HIGHER ordinary income tax rate? I don't consider that any "advantage".

If, as some posters have stated, you can buy this inside your IRA, then it is taxed the same as any other $ you withdraw from your IRA, capital gains, dividends, or otherwise. Therefore, while it's not an "advantage" tax-wise, it surely isn't a disadvantage.

A separate account of bond/stock index funds is taxed at the normal capital gains tax rate.

Ummmm...nope! Show me a bond that is taxed at "normal" capital gains tax rates.

I'll take that ANY day!

I would also take any bond any day that is taxed at "normal" capital gains tax rates.

Anything investing that involves an insurance contract is NOT going to have any kind of cost advantage. That's for sure!

Anything that involves an insurance contract (when examined by educated readers of this forum) is NOT going to have any kind of investing advantage. That's for sure!

Don't combine investing and insurance, and don't confuse the two. Insurance is for insurance. Investing is for investing. A SPIA or this deferred annuity product are essentially "insurance" for guaranteeing at least some income stream to live off of. I don't see people talking these products up as a way to reach the top 1%-2% of net worth individuals. Rather, people talk about them as a way to INSURE against not having at least some steady income stream to live off of.

These insurance products can be expected to return about 3% if you live long. I'm not talking about interest rate return. I'm talking about return on investment. As far as interest payment rate, these insurance products are fools gold, like the video explains. Eventually that fixed payment rate will stink!

Oh, so you're talking about interest rate payments? I suppose you would more strongly suggest people instead simply pluck it all down on 30 year Treasury bonds, paying.....wait for it......3%?

Oh, so we shouldn't buy 30 year treasuries, and instead just by 5 year Treasuries and wait for the interest rates to rise? Of course, the 1.5% for 5 year is just as good as the 3% 30 year. And it would have been great if someone just stuck to that plan in 2009/2010, as they waited for the inevitable interest rate reversion in...oh, yeah, rates are still non-existent.

You said "annuities might be appropriate for some retirees who worry about running out of money". Again, name for me a period in the past in which a conservative portfolio of bond and stock index funds would have run out of money. This didn't even happen if you started in 1969, the worst time in history to retire! You REALLY sound like an insurance salesman.

Do you read what you are quoting? The other poster said "annuities might be appropriate for some retirees who worry about running out of money." Name for me a 30 year period in which a portfolio DIDN'T suffer a large swing in value or volatility. You have to live off of your portfolio for 30-40-50 years. You must live every day with the volatility. Some people can handle more than others. Just as some people don't want to live below a certain threshold of standard of living, some people don't want to live below a certain "worry" of income.

Can you explain what they are supposed to do as they are worrying themselves to death as the market gyrates 20%-30% or more? you don't know what the market will do, but you do know that there is a way to help insure you have at least some income that you can depend on (based on the claims-paying ability of the regulated insurer).

I can show you how many homes have been damaged by earthquakes in St. Louis from the New Madrid fault over the past 50 years. ZERO. Obviously, it was a waste to buy earthquake insurance. And, if an earthquake did happen, it likely wouldn't level everything. But, if someone is worried about earthquake damage, it might be appropriate to buy insurance to give them peace of mind and unload that risk onto someone else. Just as with any other insurance product, be it long-term care, or umbrella insurance, or a host of other items or risks to insure against.

Yes, there is a trade-off and a cost for that peace of mind. But some people (including me) would see value in SOME level of protection/peace of mind.

 

[ETFs_Rule]

Don't combine investing and insurance, and don't confuse the two. Insurance is for insurance. Investing is for investing. A SPIA or this deferred annuity product are essentially "insurance" for guaranteeing at least some income stream to live off of. I don't see people talking these products up as a way to reach the top 1%-2% of net worth individuals. Rather, people talk about them as a way to INSURE against not having at least some steady income stream to live off of.

Oh, so you're talking about interest rate payments? I suppose you would more strongly suggest people instead simply pluck it all down on 30 year Treasury bonds, paying.....wait for it......3%?

Oh, so we shouldn't buy 30 year treasuries, and instead just by 5 year Treasuries and wait for the interest rates to rise? Of course, the 1.5% for 5 year is just as good as the 3% 30 year. And it would have been great if someone just stuck to that plan in 2009/2010, as they waited for the inevitable interest rate reversion in...oh, yeah, rates are still non-existent.

Do you read what you are quoting? The other poster said "annuities might be appropriate for some retirees who worry about running out of money." Name for me a 30 year period in which a portfolio DIDN'T suffer a large swing in value or volatility. You have to live off of your portfolio for 30-40-50 years. You must live every day with the volatility. Some people can handle more than others. Just as some people don't want to live below a certain threshold of standard of living, some people don't want to live below a certain "worry" of income.

Can you explain what they are supposed to do as they are worrying themselves to death as the market gyrates 20%-30% or more? you don't know what the market will do, but you do know that there is a way to help insure you have at least some income that you can depend on (based on the claims-paying ability of the regulated insurer).

Who are you kidding? Annuities are a place where people put their money to work. IT DOESN"T MATTER how you want to "classify" them! "Insurance products or "investment products". DOES NOT MATTER. You want the BEST return given the low level of risk that you put your money to work at.

And you are completely ignoring diversification into bonds. Gyrate 20 - 30? Name for me a period when a 33/ 67 portfolio "gyrated 30 - 30%" NEVER HAPPENED IN HISTORY! Anyone who "worries" about 20 - 30% gyrations is not properly diversified into bonds. Bonds and stocks balance each other out because money has to go somewhere. When stocks fall, money runs to the safety of bonds and vice versa. Bonds and stocks TOGETHER are not risky and not going to run down to zero when taking out 4%. The insurance companies know it.

You buy bond and stock index funds like AGG and VOO. Simple.

You REALLY sound like an insurance salesman.

 

[nun]

Who are you kidding? Annuities are a place where people put their money to work. IT DOESN"T MATTER how you want to "classify" them! "Insurance products or "investment products". DOES NOT MATTER. You want the BEST return given the low level of risk that you put your money to work at.

.

What is BEST in retirement? The highest possible return? Probably not because that would involve too much risk. A portfolio of TIPS, I-Bonds, CDs and annuities, probably not as there's little opportunity for growth, although Ziv Bodie would disagree. Still the solution for most people will be in the middle and many people will like the insurance aspect of a deferred fixed annuity if it also comes with the chance to defer income tax for another 15 years and is equivalent to a 5% tax free annual return if you live an average lifespan once you reach 85.

Personally I have no use for a QLAC or an SPIA because I'm lucky enough to have several guaranteed income sources, one being TIAA-Traditional which is a fixed deferred annuity that has paid me an annual average of 6% interest since 1987. I use it as part of my fixed income allocation. It's a very particular annuity product as it has interest rate vintages, which is why the rate is so much higher than the prevailing rates, and I have full access to the principal through systematic withdrawals and can pass it on to my heirs......so it's like a CD returning 6%. Of course there are plenty of terrible annuities too. You have to make sure you get the right one, and a QLAC might be the right one for some people.

 

[ETFs_Rule]

What is BEST in retirement? The highest possible return? Probably not because that would involve too much risk. A portfolio of TIPS, I-Bonds, CDs and annuities, probably not as there's little opportunity for growth, although Ziv Bodie would disagree. Still the solution for most people will be in the middle and many people will like the insurance aspect of a deferred fixed annuity if it also comes with the chance to defer income tax for another 15 years and is equivalent to a 5% tax free annual return if you live an average lifespan once you reach 85.

Personally I have no use for a QLAC or an SPIA because I'm lucky enough to have several guaranteed income sources, one being TIAA-Traditional which is a fixed deferred annuity that has paid me an annual average of 6% interest since 1987. I use it as part of my fixed income allocation. It's a very particular annuity product as it has interest rate vintages, which is why the rate is so much higher than the prevailing rates, and I have full access to the principal through systematic withdrawals and can pass it on to my heirs......so it's like a CD returning 6%. Of course there are plenty of terrible annuities too. You have to make sure you get the right one, and a QLAC might be the right one for some people.

Annuities are all variations of the same thing. The one commonality is that the insurance company always wins. I have never seen an annuity that was a good deal. They all wind up paying between about 0 and 5% (if you're lucky) unless you want to sign off on some ridiculous deal like giving away 100% of your principal if you die on day 1 of your contract. With these risky all or nothing contracts, if you live to be 100 you might do well, or if you die soon your ROI would be a total disaster.

You are just plain wrong about risk. Yes never bear too much risk, but NO you don't want to bear too LITTLE risk. An annuity is too little risk. CD's is not investing either. Again look at a diversified low risk portfolio of 33% total stock market index and 66% total bond market index. If you take out 4% in the early years of retirement you will be doing JUST FINE by age 83 or so. Then you can start taking out even more because your money was growing and compounding. That video explains this in even the worst case scenario.

 

[fritz]

Well, as I said, I did buy one as soon as they hit the market which is only in the last couple of months. That's one of many errors int he Kitces paper on the subject. As a customer who's been studying the upcoming QLACs for a long time, I found his post to be well-written but just full of significant errors. Starting with the one about if it was so great, why hasn't anyone bought it yet....I've followed Treasury since 2012 so I do know that even after they finally approved this reg, then it was almost a year before the insurance companies came up with offerings. Like I said, tons of errors in his blog post.

I didn't recall him saying that in his article. I went back and couldn't find it, but I could be missing it as I probably did originally. Are you referring to his comment about deferred annuities in general not selling well? He did say deferred annuities made up only 1% of annuity sales in 2014. I thought he was very honest and fair with his evaluation of them. I still don't see QLACs as something I'd consider.

 

[nun]

Annuities are all variations of the same thing. The one commonality is that the insurance company always wins. I have never seen an annuity that was a good deal. They all wind up paying between about 0 and 5% (if you're lucky) unless you want to sign off on some ridiculous deal like giving away 100% of your principal if you die on day 1 of your contract.

You are just plain wrong about risk. Yes never bear too much risk, but NO you don't want to bear too LITTLE risk. An annuity is too little risk. CD's is not investing either. Again look at a diversified low risk portfolio of 33% total stock market index and 66% total bond market index. If you take out 4% in the early years of retirement you will be doing JUST FINE by age 83 or so. Then you can start taking out even more because your money was growing and compounding. That video explains this in even the worst case scenario.

I would caution against a 4% SWR with bond yields probably being quite a bit lower over the next 10 years than the yields used in the Trinity study and of course anyone retiring now with such a portfolio would want to avoid taking out too much too soon. When it comes to risk I think I said you don't want too much or too little risk...please read my responses rather than commenting on things I have not said. A sensible portfolio will include a variety of things, equity and bond mutual funds, maybe a bond ladder, TIPS, I-Bonds and maybe even an annuity.

You could never get an SPIA today with an IRR (if you lived an average life span) much better than 2% or 3%, which is why I'm glad of my TIAA-Traditional that pays 6%. is that ok as part of a fixed income portfolio? In a perfect world where I knew that the future would be like the past and when I would die I would not buy an annuity (unless I knew I was going to live to be 100), but given those two unknowns pooling risk in an annuity is attractive and useful to many people.

 

[hurricane harry]

Annuities are all variations of the same thing. The one commonality is that the insurance company always wins. I have never seen an annuity that was a good deal. They all wind up paying between about 0 and 5% (if you're lucky) unless you want to sign off on some ridiculous deal like giving away 100% of your principal if you die on day 1 of your contract. With these risky all or nothing contracts, if you live to be 100 you might do well, or if you die soon your ROI would be a total disaster.

You are just plain wrong about risk. Yes never bear too much risk, but NO you don't want to bear too LITTLE risk. An annuity is too little risk. CD's is not investing either. Again look at a diversified low risk portfolio of 33% total stock market index and 66% total bond market index. If you take out 4% in the early years of retirement you will be doing JUST FINE by age 83 or so. Then you can start taking out even more because your money was growing and compounding. That video explains this in even the worst case scenario.

did someone force an annuity on you?

please tell us where the bad man touched you.

If you don't like or want an annuity, don't get one.
With good research, annuities can work for some people and be part of a balanced portfolio, no different than a pension.

 

[nun]

I think it's important to realize that you won't do well from an investment perspective by buying an SPIA if you use the historical returns of a balanced portfolio as a comparison. For an average life span you are looking at an equivalent interest rate on your money of maybe 3%. The deferred nature of a QLAC pushes that up to 5% and you get the added tax deferral too. But annuities are insurance. They guarantee an income. Like all insurance they are a waste of money if the insured event does not happen; you are buying risk mitigation.

If you have a portion of your income from guaranteed sources this allows you to take on greater risk with the rest of your portfolio and some studies have shown that replacing some of your bond allocation with an SPIA or DIA can allow a greater SWR in the long run. But these are just models. I think it's safe to say that no one has a definitive answer and when that happens I avoid putting all my eggs in one basket.

 

[ETFs_Rule]

I think it's important to realize that you won't do well from an investment perspective by buying an SPIA if you use the historical returns of a balanced portfolio as a comparison. For an average life span you are looking at an equivalent interest rate on your money of maybe 3%. The deferred nature of a QLAC pushes that up to 5% and you get the added tax deferral too. But annuities are insurance. They guarantee an income. Like all insurance they are a waste of money if the insured event does not happen; you are buying risk mitigation.

If you have a portion of your income from guaranteed sources this allows you to take on greater risk with the rest of your portfolio and some studies have shown that replacing some of your bond allocation with an SPIA or DIA can allow a greater SWR in the long run. But these are just models. I think it's safe to say that no one has a definitive answer and when that happens I avoid putting all my eggs in one basket.

But you're arguing points that are already covered in the video I posted. A 50/50 portfolio is too risky. Try a 33/67 portfolio and it's MUCH lower risk.
You are buying mitigation against risk that HAS NEVER EXISTED. This is explained pretty well in the video that even in the WORST year to retire you did fine.
5% is worse than what a SPIA pays and SPIA's stink. Inflation will eat that 5% alive as time goes on.
There are no experts (other than insurance salesmen) who are preaching annuities as being part of "diversification". It's an arbitrary line drawn in the sand by insurance salesmen. There are no fee-only fiduciary advisers telling people that they need to have a part of their portfolio "guaranteed". A balanced portfolio is protected by the notion that when stocks fall, money runs to the safety of bonds and vice versa.

 

[nun]

But you're arguing points that are already covered in the video I posted. A 50/50 portfolio is too risky. Try a 33/67 portfolio and it's MUCH lower risk.
You are buying mitigation against risk that HAS NEVER EXISTED. This is explained pretty well in the video that even in the WORST year to retire you did fine.
5% is worse than what a SPIA pays and SPIA's stink. Inflation will eat that 5% alive as time goes on.
There are no experts (other than insurance salesmen) who are preaching annuities as being part of "diversification". It's an arbitrary line drawn in the sand by insurance salesmen. There are no fee-only fiduciary advisers telling people that they need to have a part of their portfolio "guaranteed". A balanced portfolio is protected by the notion that when stocks fall, money runs to the safety of bonds and vice versa.

I'm sorry you are relying on old studies using old numbers. Given the current US 10 year T-bill yield someone relying on a bond heavy portfolio would not be well advised to withdraw 4% as the studies your video rely on use bond yields that are higher than we might expect in the next decade. There are plenty of retirement academics and professionals who advocate annuities as part of a portfolio, they are usually DIAs for longevity risk. Variable annuities are almost universally seen as rip offs and so are never recommended......do some Googling...maybe start with "liability matching".

 

[ETFs_Rule]

I'm sorry you are relying on old studies using old numbers. Given the current US 10 year T-bill yield someone relying on a bond heavy portfolio would not be well advised to withdraw 4% as the studies your video rely on use bond yields that are higher than we might expect in the next decade. There are plenty of retirement academics and professionals who advocate annuities as part of a portfolio, they are usually DIAs for longevity risk. Variable annuities are almost universally seen as rip offs and so are never recommended......do some Googling...maybe start with "liability matching".

This is explained in the video. We've ALREADY been through these rising interest rate climates. Watch the part about 1969 onward.

These "academics" are often also employed or connected with the insurance industry. David Babbel is a prime example. His "study" reads like boilerplate insurance sales tactics as he touts index annuities.
Fiduciaries like Ric Edelman all say to avoid annuities. He was telling a caller to AVOID QLAC's just about a week ago.
It's not just variable and index annuities that are scams.