From now on, forget your previous notions about annuities. From now on, substitute the word annuity with: income for life.
For example, “I am buying this type of annuity because I want an income for life.” “I have structured my portfolio with dividend paying stocks, which act as an annuity because I want an income for life.” “I own a combination of stocks and bonds in my portfolio because when I retire, the cash from these investments will act as an annuity because I want an income for life.”
The words annuity and income for life should be synonymous in your mind.
There are four types of annuities and they all have the same purpose, to provide income for life. They are deferred annuities, fixed annuities, indexed annuities and variable annuities. As of today, the only one we would consider is the deferred annuity but it is instructive to understand why we currently do not recommend the other three. However, we include them because a number of our fans own these products. They are looking for alternative ways to invest the assets in these products either more intelligently or cheaper.