Get free help preparing your taxes from AARP Foundation Tax-Aide. Find a location



Rewards for Good Sweepstakes
Win an ARRP Real Pad Tablet - Tribute to an Ancestor Contest

Contests and

Rewards for Good Sweepstakes

Learn about Rewards for Good and you could win $25,000! See official rules.

Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

AARP Books

Visit the Money Section

Enjoy titles on retirement, Social Security, and becoming debt-free.

Jobs You Might Like

most popular


Buying Your Own Pension

Annuities with guaranteed benefits are complex and costly

For new purchasers. Annual expenses might exceed 3.5 percent per year (more, if you include a spouse), reports Kevin Loffredi, a vice president of Morningstar. Smart buyers aim for high long-term gains by loading up their investment accounts with stocks. If you guessed wrong, you can always fall back on your minimum income guarantee. Since the 2008 financial crisis, however, insurers have limited the percentage you can invest in stocks. You have to hold more bonds, whose returns aren't worth the high fees you pay.

New buyers should look for products that still let you put up to 80 percent in stocks, says Moshe Milevsky, author of The 7 Most Important Equations for Your Retirement. Also, look for low fees — 3 percent or less. You'll find especially low fees at the Vanguard Group or Fidelity Investments.

For people holding older living-benefit annuities whose investment account has plunged. "Don't wait for the value to recover," Milevsky says. "Start your guaranteed-income payout right away." In most cases, the payment stream is worth more today than it will be if you wait a few years.

For people who don't understand exactly how the product works. Don't buy on someone else's say-so. You might get trapped in a low-performing annuity with high surrender costs. In February, a California insurance agent drew a 90-day jail sentence for selling an annuity to an 83-year-old woman with dementia. (Her boyfriend advised her on the purchase. He and his daughter were the beneficiaries.)

For a low-cost alternative to living-benefit annuities. Consider putting part of your long-term money into a "deferred-income" annuity with guaranteed payments starting at some point in the future. For growth and inflation protection, put the rest of your money into your own choice of low-cost U.S. and international stock mutual funds.

If you prefer a one-stop package deal, however, living-benefit annuities can be a reasonable, although an expensive, choice.

Jane Bryant Quinn, a personal finance expert, wrote Making the Most of Your Money NOW.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts


Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

The Cheap Life

Jeff Yeager Cheap Life Ultimate Cheapskate AARP YouTube web series save money

Catch the latest episode of The Cheap Life starring Jeff Yeager, AARP's Ultimate Cheapskate. Watch

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Life insurance: you are covered rain or shine

Exclusive annuities for members from AARP Lifetime Income Program from New York Life.

AARP Credit card from Chase

Members can get cash back rewards on purchases with the AARP® Credit Card from Chase.

member benefit aarp financial service auto insurance

AARP® Auto Insurance Program from The Hartford offers members no-cost quotes.

Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points

Advance your skills. Transform your career.

Explore your learning possibilities.