The Financial Industry Regulatory Authority (FINRA) published an Investor Alert to help investors decide on how to invest for retirement. An annuity makes periodic payments to the holder of the annuity. There are fixed annuities that make fixed payments and variable annuities that make variable payments.
Annuities can carry costs and risks that many investors may not be aware of because brokers who are incentivized by commission-generation do not make them clear to investors. Costs include surrender charges on the investor who seeks to withdraw money during a pre-specified 'surrender period', and fees such as advisory fees, mortality and expense charges and administrative fees.
