I can’t help but notice that there is a general perception out there that annuities are less desirable. Whether because they are regarded as less secure, or because the media coverage of annuities has taken on a definite negative tint, “annuity” has become almost a dirty word for many retirees and pre-retirees. Annuities are actually more secure than many/most forms of investment, and while disasters can happen due to unforeseen events (an Enron-style collapse being Exhibit A), annuities can be an important and reliable way to provide steady retirement income option for many. I think far too many people shy away from annuities for reasons that are more about perception than reality. Consider that both defined benefit pension plans and social security–two of the more universally well-regarded forms of retirement income–are both a kind of annuity. Defined benefit pension plans, where essentially the company is funding the program and taking all of the investment risk, are a particularly appealing form of annuity. Unfortunately, many firms have smartened up in recent years, partly as a result of the turmoil and controversy surrounding these issues that has taken place in the airline industry. Today, more and more firms are switching to a defined contribution plan, where now it is the employee putting the money in, the employee picking the investments, and the employee taking the investment risk. Annuities encompass a wide range of investment and income options, and, while they may not be right for everyone, you are doing yourself a disservice if you fail to appreciate the potential value in an annuitized investment.