Annuities Are Confusing? Really?

There is an interesting article in today's New York Times about 401K plans and how they have lost so much value in the current downturn. It sems that they are not the retiremkent panacea that was hoped for by so many. When Dan retired we bought an annuity with his retirement assets. One of our friends, an accountant no less, thinks annuities are "kinky." Well, it turns out that we did the right thing:

Older investors now want what their elders had: a pension income they can count on for as long as they live. A Fidelity Investments survey released last week found that 85 percent of investors 55 to 70 years old placed greater importance on a guaranteed monthly retirement income than on above-average investment gains. Expect to see new, more conservative financial products and government initiatives to encourage voluntary savings plans. But few have figured out how to get there. A 2007 consumer finance survey by the Federal Reserve Board found that only 5.5 percent of families owned an annuity, a financial product designed to provide reliable retirement income but rarely chosen by the layman because they tend to be complex and confusing.