<<My brother has put some into an annuity. ... he sells annuities and life insurance for a living. It's good to know he's buying his own product.>>From the viewpoint that he's selling something that he believes is a good thing, yes. It means he is honest. But the fact that he believes this does not, in fact, prove that it is indeed good. Does he also sell and buy whole life insurance? If so, then I would question his level of accurate, unbiased knowledge. << I think you really have to look hard at the expenses and returns of an annuity to make a judgement - they probably are not all bad. Unfortunately the info is not as accessible as it is for a mutual fund, for example, where you can look up expenses and returns in Morningstar or elsewhere. You have to dig for it from the person who's trying to sell you one.>>The problem here is multifold: a) he might not know, b) what he does know may not be accurate, c) it is out of hes area of expertise (he is, after all, a salesman, not a portfolio manager), d) if he stands to earn a commission, he is a very biased source of information. Even if all this pans out ok, there is: e) the expenses, etc. may totally change the next day after you buy, and there is nothing you can do about it, f) if it is hard to get this information _before_ you buy, think how hard it's gonna be _after_ they have your money.To my mind, one of the biggest drawbacks is that you are locked in for a very long time. Several people have mentioned that you must hold for 10-20 years before you come out ahead. But the economic and tax environment can change at any time, and the assumptions that made the annuity a good thing at the time you bought it may change drastically. As I recall, both the 1986 and (especially) 1997 tax law changes had very bad effects on annuities.Ray
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