What Are The Risks Of A Fixed Annuity? 
The main risk people face with fixed annuities is the buying power of the payments you receive because they do not have a cost of living adjustment -LRB- COLA -RRB- built in . Annuities offering COLAs are available , but generally require a higher premium to account for the increase in payments . How the annuity is structured is very important . You have a number of options to choose from when creating the annuity that will influence your monthly distributions . If the policy is set up to only make payments while you are living -LRB- a single-life annuity -RRB- , then once you die the payments cease and whatever funds were paid into the annuity are not returned . You can also structure the distributions to continue until the spouse dies -LRB- a joint life annuity -RRB- . Another structure or to force payments to continue for a specified number of years -LRB- and go to a tertiary beneficiary - e.g. your kids -RRB- . The drawback of a period certain annuity is you can run the risk of outliving the annuity -LRB- e.g. you 're 65 years old and you have a 15 year period certain annuity that makes payments to you until age 80 . If you live to 81 , you will no longer have those funds to depend on each month . -RRB- . It 's important to consult with an experienced annuity broker who can discuss your situation with you on a personal level and help you create an annuity that will best serve your needs . I hope the information is helpful - please feel free to contact me for help and if you have any other questions . Thanks very much . 