With an eye firming fixed on the first wave of Baby Boomers about to retire, the insurance industry is repackaging its offerings as “retirement planning” tools, TheMotleyFool.com reports.

But many of the riders on these annuities are costly and, quite possibly, not worth investors’ additional cash.

For example, many annuities now offer guaranteed minimum accumulation benefits (GMABs) that promise the value of the annuity contract will rise by a certain percentage, often 6%, over time.

But there’s a catch. GMABs often include mortality and expense charges, boosting the fees to 3% a year, and commit investors to keep their money in the contract for 10 years. Given the track record of the stock market over the long term, the 6% guaranteed return soon pales in comparison.

Then there is the problem of people already in retirement being sold equity indexed and variable annuities, being told their benefits of lifetime payouts—when they really should be buying an immediate fixed annuity. While it won’t pay a death benefit to the contract owner’s heirs, it does provide them with a larger income stream.

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