Their prices may also be fixed to get a restricted period, and after that drop say, following the very first year. In the event you do not just like the new prices and wish to withdraw your cash early, heavy surrender charges could kick in and reduce into your returns.
Plus, in the event you determine to go for fixed lifetime payments, these payments won't rise to help keep pace with inflation. Consequently, the worth from the cash you obtain will decline more than time as inflation erodes the buying energy of every dollar. So for instance, in the event you retire young and strategy to help keep collecting annuity payments to get a longer time period, the buying energy of one's cash might be a large concern.