If you’ve been wondering whether annuities are still worth it in 2025—or if they’re just a clever way for insurance companies to take your money—you’re not alone. This is one of the most common questions I get.
And I get it. You’ve worked hard for your money, and you don’t want to throw it into something that doesn’t grow or feels like a “rip-off.”
Let’s break this down clearly so you can decide for yourself.
Need help choosing the best annuity for your unique situation? Have questions about getting an annuity? If so, it’s best to speak with an annuity specialist. Watch this short video to see how I can help you do this (at no cost to you!)
Tip: See how much an annuity could pay you using our annuity calculator.
What Annuities Really Are (and What They’re Not)
Insurance carriers sell life insurance and annuities—but for opposite reasons.
- Life insurance protects your family when you die.
- Annuities protect you while you live.
They’re contracts—guaranteed agreements that can provide lifetime income, often for as long as you live. But whether they’re a good fit depends on what you want: guaranteed income or more market growth.
👉 Want to see what current annuity payouts look like? Use my annuity calculators to see live payout numbers.
The 2025 Reality Check: What $500,000 Can Actually Do
Let’s look at a real example.
A 62-year-old client wants guaranteed income in 5 years (starting at age 67).
They’re not looking for “maybe” income from the stock market—they want contractual paychecks that never stop.
When we compare options side-by-side:
- A $500,000 annuity can pay roughly $56,000 per year for life, starting at age 67.
- By age 95, that same person would have collected $1.6 million in total income.
Sure, you might earn more in the stock market—but that comes with risk and no guarantees.
💡 Pro Tip: The real value of an annuity isn’t in the “rate of return.” It’s in the peace of mind that you can’t outlive your income.
Are You Getting Ripped Off?
Here’s the truth: If you expect your annuity to “beat” the stock market every year, you’ll be disappointed.
But if your goal is guaranteed income, security, and simplicity in retirement—then no, it’s not a rip-off at all.
In fact, for many retirees, it’s the opposite.
It’s freedom from worrying about market crashes, interest rates, and withdrawal mistakes.
You can use annuities for:
- Guaranteed lifetime income (like a personal pension)
- Bridge income before Social Security
- Safe accumulation through fixed-rate MYGAs (multi-year guaranteed annuities)
Understanding the Trade-Offs
Not all annuities are created equal. Some pay higher initial income but drop later (like accelerated income riders). Others keep payments level for life.
If you don’t want your income to drop in the future, focus on “no income reduction” options that provide level lifetime payments.
And always look at the insurance company’s financial rating.
- A-rated carriers have stronger reserves and higher safety margins.
- B+ carriers can still be solid but are better suited for those comfortable with slightly more risk.
👉 Want to compare top-rated carriers side by side? Schedule a call with and get a full list—no sales pressure, just transparency.
Is It Right for You?
Here’s the bottom line: Annuities aren’t designed to make you rich—they’re designed to make sure you never run out of income.
If you’re 55+ and thinking, “I’ve spent decades growing my money. I just want to enjoy it safely,” then annuities might be exactly what you’re looking for.
You can still keep a portion of your money in the market for growth, but annuities let you lock in peace of mind for the rest of your life.
Conclusion
So, are annuities a rip-off in 2025? Not if you understand what they’re for. They’re for people who want stability, not speculation. They’re for people who value guaranteed income over “maybe” returns.
And they’re for retirees who want to stop stressing about what the market does next week.
Need help with finding the best annuity for your retirement?
Click here to schedule a call with me.
On the call, I can help you:
- Determine what type of annuity is best for you
- Find the highest paying annuities for your unique situation
- Answer any other questions you may have
Answer any other questions you may haves