Annuities are often marketed as stable investment products designed to provide predictable income in retirement, offering peace of mind for individuals seeking long-term financial security. While annuities can indeed play a valuable role in a retirement portfolio, they come with hidden costs and risks that investors should carefully evaluate. From lack of liquidity and high fees, to complex terms and potential insolvency, these risks can impact the effectiveness of annuities in meeting long-term financial goals. Below, we explore the key challenges associated with annuities and why they may not be suitable for everyone. 1. Fees and Expenses The cost structure of annuities can be complex and costly. Annuities often include a range of fees, such as administrative fees, management fees, and surrender charges. Over time, these fees can substantially diminish the net return on investment. For instance, variable annuities typically have higher fees due to additional expenses like mortality and expense risk charges. Investors should be aware of these costs, as they may erode income potential and result in lower-than-expected payouts. 2. Limited Investment Choices While some variable or indexed annuities provide a variety of