Consider the Source: The Anti-Annuity Narrative and Who It Serves

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June is Annuity Awareness Month, which means your inbox, your podcast feed, and your social media are about to fill up with two kinds of messages: people telling you annuities are the answer to everything, and people telling you to run. Both are selling something.

The honest starting point is this: annuities are not good or bad. They are tools, and like any tool, the question is never “is this a good tool?” — it’s “is this the right tool for the job in front of me, in the hands of someone who knows how to use it?” A nail gun is a remarkable tool. It is also a terrible way to hang a picture frame.

So before you accept anyone’s verdict on annuities — including the strongly negative ones that sound like consumer protection — it’s worth asking a simple question: who benefits from me believing this?

Why Some Firms Are Built to Dislike Annuities

There are large, reputable financial companies whose marketing is, in effect, an ongoing campaign against annuities. That’s worth sitting with for a moment, because it’s an unusual thing for a company to organize its message around what it won’t sell. The explanation is less about product quality than about business models.

Most large investment firms are built on assets under management. Their revenue is a percentage fee charged on the money they manage, billed quarter after quarter, year after year. It’s a good model — it aligns the firm with growing your account, and it produces predictable, recurring income for the company. But it has a structural feature that matters here: every dollar that leaves the managed account stops generating that recurring fee. When a dollar moves out of a portfolio the firm bills on and into an insurance contract it doesn’t, the firm’s revenue on that dollar doesn’t shrink — it ends.

Annuities are compensated differently. With many annuities, the bulk of the compensation is paid once, at the time of sale, and the majority of it goes to the individual advisor or agent who writes the contract — not to a corporate parent’s recurring revenue line.

Put those two facts together and the picture comes into focus. For a large fee-based corporate entity, an annuity isn’t just a different product — it’s a product that interrupts the recurring revenue the entire enterprise is designed to produce, while sending most of the compensation somewhere the company doesn’t capture it. You don’t have to assume bad faith to understand why such a firm’s marketing would lean against annuities. Its business model is doing exactly what business models do.

None of that makes the firm wrong. Plenty of annuities deserve criticism, and we’ll get to that. But it does mean the loudest anti-annuity voices often have the most to lose if you buy one — and that is precisely the kind of conflict you’d want disclosed before you weighted their opinion.

The Cherry-Pick: Judging “Annuities” as if They Were One Thing

Here’s the move that makes the anti-annuity narrative so effective, and so misleading: it treats “annuities” as a single product. They are not. The word covers a family of very different contracts that do very different jobs, with different trade-offs. The narrative works by taking the worst feature of one type, the highest fee of another, and the tightest restriction of a third, then bundling them together and presenting the pile as if every annuity carried all of them at once.

It’s like reviewing “cars” by listing the fuel economy of a heavy-duty truck, the cargo space of a two-seat sports car, and the price tag of a stretch limousine, and concluding that nobody should ever own a car. Consider a few of the main types and what each is actually built to do:

Notice that these aren’t variations on a theme. A SPIA and an accumulation FIA are about as similar as a delivery van and a motorcycle — both are technically vehicles, and that’s about where the resemblance ends. Criticizing “annuities” without saying which annuity is like warning someone off “vehicles” because motorcycles are dangerous.

The Clearest Example: “If You Die, the Insurance Company Keeps Your Money”

This is the single most repeated line in the anti-annuity playbook, and it’s worth taking apart carefully, because it shows the cherry-pick happening twice in one sentence.

First, it describes only one type of annuity. The “insurer keeps what’s left” concern applies to immediate income annuities — SPIAs — where you’ve exchanged a lump sum for a stream of income. It does not describe a MYGA, where your beneficiaries receive the account value. It does not describe an accumulation FIA, an income FIA, or a guaranteed income FIA, where account value generally passes to your heirs. Applied to the whole category, the claim is simply false for most annuities people actually buy.

Second — and this is the part the narrative almost never mentions — it isn’t even universally true of SPIAs. The scenario where the insurer keeps the remainder describes the life-only payout election specifically. That’s the option that pays the most per month precisely because it’s a pure bet on longevity. But it’s a choice, not a requirement. Choose a cash refund, installment refund, or period-certain option instead, and any remaining value passes to your beneficiaries — in exchange for a somewhat lower monthly payment.

So the headline critique takes one payout option, of one product type, and projects it across the entire family of annuities. That’s not an oversimplification. It’s a cherry-pick stacked on a cherry-pick — and the people who repeat it for a living know these distinctions exist.

The Criticisms That Are Fair — and Why Naming Them Strengthens the Point

If the argument were “all annuity criticism is dishonest,” it would be just as much of a cherry-pick as the narrative it’s responding to. It isn’t, and it’s important to say so plainly.

Some annuities are genuinely expensive. Some carry layers of fees and riders that are hard to understand and harder to compare. Some lock your money up with surrender charges that don’t fit a household’s real liquidity needs. Some are sold to people who never needed them, to solve a problem they didn’t have, by someone compensated to make the sale. Those criticisms are real, and a serious advisor doesn’t wave them away.

But notice what those legitimate criticisms actually are: they’re arguments about fit, cost, and conduct — the wrong product, at the wrong price, sold the wrong way. They are not arguments that the entire category is illegitimate. Conceding the real flaws doesn’t weaken the case for thinking clearly about annuities. It sharpens it, because it relocates the question to where it belongs: not “annuity: yes or no,” but “the right contract, for the right job, recommended by the right person.”

A Better Question: When, Who, and How Do You Want to Be Paid Back?

Once you stop asking whether annuities are good and start asking what job you need done, the whole conversation changes. The useful questions are about timing and structure:

Those answers point toward different tools, or toward no annuity at all. Income now for life points one direction; protected growth with full access for heirs points another; safety for a defined term points to a third. The product follows the job — never the other way around.

This is exactly why, in the Retire REGAL® process, an annuity is never treated as “the plan.” It’s treated as a job that can be delegated. Within the REGAL Stronghold™, the Foundation layer is where stability lives — the income designed to support essential expenses so the growth-oriented Battlement layer doesn’t have to be sold into a downturn to pay the light bill. When an annuity is the right fit, its role is to do one specific job inside that structure: convert a portion of assets into income designed to function across varied market conditions, so the rest of the plan is freer to do what it does best.

Delegated that way — to a defined role, sized to the structure, matched to the job — an annuity can become a powerful part of a retirement plan. Used the wrong way, as a one-size-fits-all answer bolted onto a plan it doesn’t fit, it becomes exactly the cautionary tale the critics love to cite. Same category. Completely different outcome. The difference is the fit.

The Devil Is in the Details — and Not All Carriers Are Equal

Even the right type of annuity is only as good as the contract and the company behind it. This is where the anti-annuity narrative and the over-eager annuity salesperson make the same mistake from opposite ends: both talk about annuities in the abstract.

In practice, the details are everything. Two contracts that look alike on a brochure can differ meaningfully in their crediting methods, their caps and participation rates, their rider costs, their surrender schedules, their income-rider mechanics, and — not least — the financial strength and claims-paying ability of the issuing insurer. An annuity’s guarantees are only as dependable as the company standing behind them. Carriers are not interchangeable, and products are not interchangeable.

That’s not a reason to fear annuities. It’s a reason to do the work — or to work with someone whose job is to do it for you and who has no incentive to cut a corner.

Which Brings It Back to One Thing: The Advisor

Strip away the marketing on both sides, and the annuity question ultimately comes down to the recommendation in front of you and the person making it.

There are bad actors in this industry. There are people who lead with the product because the product pays them, and who will fit your situation to the sale rather than the sale to your situation. The anti-annuity crowd is right that these people exist. They’re just wrong about the cure. The answer to a bad annuity recommendation isn’t to swear off annuities any more than a bad meal means you should swear off restaurants. The answer is to work with someone you trust to recommend the right thing.

What does that look like in practice? Someone who asks more than they pitch. Someone who is genuinely listening to your needs before any product enters the conversation. Someone who can tell you plainly when an annuity is not the right answer for you — and means it. And someone who evaluates any recommendation by a single standard: does this strengthen your retirement strategy as a whole, or does it just optimize one piece at the expense of the others?

That’s the real test — and it’s the one question Annuity Awareness Month never actually asks. None of this was ever about annuities. It’s about whether the person giving you advice is weighing it against your entire retirement, or just the part they’re paid on. Get that right, and whether an annuity belongs in your plan becomes a question that answers itself.