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Millions also hold billions of dollars in fixed-rate annuities.
Yet, despite their growing popularity, annuities are faulted by many critics who perceive them as having high expenses and shoddy payouts. Still, before buying one, you should know the basics. It's a contract in which a provider agrees to pay an investor a certain amount of money over time. In recent years that has generally ranged between 5 and 7 percent. Variable annuities are linked to the stock market.