ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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In the case of annuity, it is not so clear cut in my view. While others are funding their retirement with other financial instruments, if I buy an annuity as an insurance, then I must be hedging against the other instruments failing. The problem is annuity has its own risks, and inflation is one of them. If one buys annuity for financial protection in the case of longevity, then the inflationary effect should be considered, particularly if one plans for more than 3 decades out in the future. Never mind hyperinflation, does it even protect against the historical average inflation, I would ask. ...
This is exactly as I see it. The annuity must be compared to the alternatives.
-ERD50