I have experience in actuarial analysis - this is the field of finance that analyzes annuities, values annuities, and creates investment plans for companies paying annuities. I don't necessarily think that annuities are a rip-off, but I don't really like them, and I very rarely recommend them to people. The typical annuity advertises 'guaranteed income for the rest of your life'. And they are generally correct - annuity companies very rarely go out of business. They are very secure - almost as safe as life insurance companies.

In fact, they seem like very good investments, until you compare the alternative: investing your own money, and taking it out little by little, essentially creating your own annuity. In fact you can 'do it yourself' much cheaper, and in many cases, much better, with a financial adviser then an annuity company offers.

An annuity generally has a high 'expense ratio', which pays the salesman's commission. If the investments in an annuity make money, then the company profits. With your own investments, you keep more of your own money, so you start out ahead. If your investments do better than expected, you get a bonus! Even if your investments do poorly, you make adjustments to your income, and over the long run, you generally come out ahead. As a bonus, when you die, you leave an inheritance. Not so with an annuity - it pays until you die - if you die quickly, they keep the rest of your money.

Is there are place for an annuity for investors? Sure. If you are of very good health, perhaps you don't have any heirs (remember that annuities disappear when you die!) and don't want to risk your own investments, and don't like financial advisers, then you pay big expenses to someone who guarantees an income for your life. But if any of those circumstances isn't true, then you should skip the annuity and 'do it yourself', using a financial adviser.