Jacob’s Story: Why He Found Annuities for His Parents
About six months ago, Jacob moved his parents into a retirement home after a long and emotional decision-making process. His dad had been managing the house mostly by himself after my mom’s mobility issues worsened, and it just wasn’t safe anymore. Jacob found a great independent living facility, but the cost hit harder than he had expected. Watching his dad stress over their monthly income, even with Social Security and some savings, really opened Jacob’s eyes to the need to find a better solution.
That was the Jacob started thinking differently about retirement planning. He had always assumed his parents were set. They had investments, significant debt, and modest pensions. But the reality was more fragile. Every market dip gave them anxiety, and figuring out how to cover a consistent monthly bill without draining their savings felt like juggling.
It’s unsettling to hear stories about retirement funds not lasting as long as planned. A friend of the family recently shared how her father’s entire portfolio, heavily invested in market-dependent accounts, was essentially “eaten alive” by volatility, leading him to run out of money prematurely. She felt an annuity could have made all the difference, a thought that made Jacob pause.
Then there was a story from one of Jacob’s friends, a guy in his forties, who helped his parents set up a fixed annuity to cover most of their housing and medical bills. The peace of mind it brought was clear: “They sleep better knowing their bills are paid every month, no matter what the market does.” That sense of security is precisely what Jacob wants for his parents.
The most impactful story, though, was from someone close who deeply regretted not exploring annuities before their mother passed away. Their mom spent her final years consumed by the stress of possibly running out of money. For them, the big “aha moment” was realizing that retirement isn’t just about assets, it’s about income. That perfectly articulated a feeling Jacob had but hadn’t quite put into words.
So now Jacob is researching annuities, not just as a product, but as a way to give his parents something they’ve earned: stability, dignity, and a retirement that doesn’t feel like a financial puzzle every month. Here’s what he learned.
Who Might Consider Annuities
Annuities aren’t for everyone, but they can be an excellent fit for people looking to turn part of their retirement savings into predictable monthly income.
Here’s who might benefit from an annuity:
- Retirees without a pension who want a “DIY” guaranteed income stream
- People are nervous about stock market volatility affecting their retirement spending
- Families supporting aging parents who need consistent income to cover housing or care expenses
- Adults in their 40s or 50s are planning for their retirement and looking to supplement Social Security.
- Anyone who wants to convert a lump sum into a reliable, long-term income that they can’t outlive
Annuities offer the peace of mind of steady cash flow, which becomes more important as you transition from saving money to spending it.
Recommended Online Annuity Providers of 2025
Comparing Annuity Options
One of the first things Jacob learned while researching annuities is that there’s no one-size-fits-all. Here’s a breakdown of the main types and what they’re typically used for:
- Immediate Annuities
- You pay a lump sum and start receiving payments right away (usually within 30 days to a year).
- Best for: Older retirees who need income now and don’t want to manage investments.
- Deferred Annuities
- You invest money now, but payments begin at a future date.
- Best for: Individuals in their 40s or 50s seeking a guaranteed income that begins later in life.
- Fixed Annuities
- Offers a guaranteed payout at a fixed rate.
- Best for: Individuals prioritizing certainty over potential market growth.
- Variable Annuities
- Payments fluctuate based on market performance.
- Best for: Individuals who are comfortable with risk and seeking potential growth, but are willing to pay higher fees.
- Indexed Annuities
- Tied to a market index (like the S&P 500), with a guaranteed minimum and capped growth.
- Best for: People who want upside potential with some downside protection.
Things to consider before buying:
- Your parents’ age and health
- How soon do they need income
- Inflation protection
- Surrender periods (how long the money is locked up)
- The insurer’s financial strength rating
Jacob found that working with a fee-only financial advisor or using a transparent online platform is a smart way to shop around without getting hit with sales pressure.
Risk Factors of Annuities
While annuities can be helpful, there are real risks and limitations:
- High Fees: Variable annuities, especially, can come with layered costs—mortality fees, rider fees, and administrative fees. Read the fine print.
- Surrender Charges: If your parents need access to the money early, there may be steep penalties.
- Inflation Risk: Fixed payments may not keep up with the rising cost of living unless you choose an annuity with an inflation rider.
- Complexity: Some products are so confusing that even experienced investors get tripped up. Simple is often better.
- Irreversibility: Once you annuitize (start taking income), you may not be able to get the original money back, especially with lifetime or single-life contracts.
The internet’s consensus? Annuities can be a powerful tool, but only if you fully understand what you’re buying and why it fits your (or your parents’) goals.
Compare the Best Annuities of 2025
1. Gainbridge
- Why Reddit Likes It: Straightforward fixed annuities with no fluff. Transparent rates and easy online signup.
- Best For: People who want a simple, low-cost annuity product without dealing with agents.
- Standout Feature: Competitive fixed annuity returns and a digital-first experience.
2. Nationwide
- Why Reddit Likes It: Strong reputation and a wide range of annuity products, including indexed and variable options.
- Best For: People who want flexibility and optional riders (like inflation or spousal continuation).
- Standout Feature: Robust planning tools and reliable customer service.
3. Athene
- Why Reddit Likes It: Known for strong indexed annuity offerings and clear communication.
- Best For: Those seeking long-term income with some market upside.
- Standout Feature: High caps and bonus features with some contracts (be sure to check the fine print).
4. Blueprint Income
- Why Reddit Likes It: They partner with multiple insurance carriers and offer a marketplace model.
- Best For: Shopping and comparing multiple fixed annuity quotes at once.
- Standout Feature: Fee-transparent, educational platform that helps you compare across providers.
5. Fidelity
- Why Reddit Likes It: Trusted brand with lower-cost annuities and no commission-based sales.
- Best For: People already managing retirement accounts through Fidelity.
- Standout Feature: No-frills annuities and excellent educational resources.
Final Thoughts: Choosing the Right Annuity
Helping his parents transition into retirement housing taught Jacob something he didn’t expect. Retirement isn’t just about having enough money; it’s about knowing that money will show up every month. Watching his parents try to plan their budget around unpredictable investment returns made him realize how valuable guaranteed income is.
Annuities aren’t perfect, but they’re one of the few tools that can give you that peace of mind. And peace of mind is precisely what he wanted for his parents, and someday, for himself too.
If you’re helping aging parents or starting to plan for your future, don’t wait to explore your options. A little predictability can go a long way.
Frequently Asked Questions
We answer the questions that matter most about annuities.
An annuity is a financial product that converts a lump sum of money—often from retirement savings—into a stream of guaranteed income. You buy it from an insurance company, and depending on the type, it can start paying you right away (immediate annuity) or at a later date (deferred annuity). It’s designed to provide predictable monthly income, often for life, which can help cover housing, medical, or everyday living expenses in retirement.
Yes, especially if Social Security doesn’t fully cover their monthly expenses or they don’t have a pension. An annuity can act like a second paycheck, reducing the stress of managing market fluctuations or drawing down investment accounts. Many retirees find comfort in knowing they have enough income each month to cover fixed costs, regardless of how markets perform.
Immediate annuities and fixed annuities are often used for steady, guaranteed income. Indexed annuities can offer some market upside with protection from losses, while deferred annuities are good if you want to plan and start income later. The right choice depends on your parents’ age, health, risk tolerance, and whether they need income now or in the future.
Annuities can come with high fees, surrender charges if you withdraw early, and the risk that fixed payments won’t keep up with inflation. Some products are overly complex or pushed by aggressive sales reps. It’s essential to choose a reputable provider, fully understand the terms, and consider inflation protection if your parents will rely on the income for many years.
