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After perusing your insightful articles on the pitfalls of investing in annuities, I thought I'd better ask your opinion about the situation of many of us in academia. TIAA-CREF has long been a leader in the management of 401(k) plans for faculty and staff at universities across the nation. Their traditional annuity currently guarantees a return of 8.5% with very low risk. Other current choices include a real estate annuity (currently running at 9.0% with slightly higher risk), a money market fund (around 7.0%), and various equity and bond mutual funds. Picking individual stocks is not an option. I'm 48 years old and am a conservative investor. I'm worried that the current market is close to being 40% overvalued by historical measures (3 x book value, 15 x EPS, 24 X dividends). Doesn't it make sense for me to invest a sizeable chunk of my retirement money in a highly respected, low risk annuity paying a respectable return, rather than gamble on an equity index or corporate bond fund?

Thanks for your advice.
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