 Also, keep in mind that annuities are insurance products, so the financial strength of the insurance company is crucial. You want to make sure you're dealing with a highly rated, financially stable company. Lastly, annuities should typically be one part of a diversified retirement income strategy. They can provide a base of government income, which you can then supplement with other investments like bonds, dividend-paying stocks, REITs, depending on your risk tolerance and income needs.