I'll speak up although I know little about annuities other than the fact that sales commissions are lucrative and fees are high (maybe a connection?). If you want to invest in an s&P index type fund, there is no more expensive way to do it than to buy it through an annuity. CDs and MMFs are much more conservative and you won't loose money, although you won't make much either. Your circumstances determine if you will be needing this money soon and that would be the main factor determining whether you might want to have a lot in stocks. My advice is to read everything you can and make an informed decision. Alternatively hire a fee based financial planner who doesn't stand to benefit from selling you something.

I am not impressed that the annuity company isn't penalizing you for government mandated distributions.

The supposed advantage of annuities is tax deferral- which is irrelevant in a IRA.