An important caveat to the risk-free option of owning an annuity is that buying one is not necessarily risk-free. Annuity prices are based on long-term interest rates. The lower the interest rates, the less income you get from an insurance company. Suppose you spend your working years with a single goal: $1 million in the bank on the day you retire. In 2000, when ten-year real interest rates were 4.4 percent, $1 million would buy you a twenty-year inflation-adjusted annuity that paid out $75,000 a year. In 2017, when real ten-year interest rates were 0.43 percent, that $1 million would buy you
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