We live in a society that wants to stay young forever, so it's no surprise that annuities are a part of retirement planning.
With an annuity, you invest a set amount of money and then get a monthly payment for the rest of your life. So if you're looking to stay young and live forever, a dependable income stream could rank right up there with Botox and the push-up bra.
The problem is that while annuities offer tax-deferred growth on your investment, there are so many hidden fees that actually outweigh the tax efficiency. There are tons of setup and administrative fees as well as steep surrender charges if you need the money before your retirement; annuities sold by insurance companies often carry extremely high fees, so tread carefully.
But if you've put as much money as you can into your 401(k), Roth IRA or traditional IRA, then an annuity could be a great way to continue your tax-deferred savings if you truly understand these products.