It is generally assumed stock market (such as S&P 500 index) is averaging 8% a year OVER LONG TERM (50 years etc). But it is no guarrantee in the next 10-20 years the stock market will give you 8% or even 6.5% per year average growth. This is where insurance company makes money on your annuity.
You give them $100K, they promise you 6.5% a year income, so you get $6.5k EVERY YEAR. But if they put your money in stock market, OVER LONG TERM they are going to make 8% (8K) a year, the insurance company makes 2.5% profit using your money to cover their cost, salaries, and eventually company profit.
Annuity is a gurranteed investment. It is useful for example, If your wife is a housewife who does not know anything about money managment, and you worry if you die she'll be cheated out of her inheritance, you buy her an annuity. It guarrantees X% of income every year, so she can enjoy her life.
I personally think a person with a college degree should be able to do better than annuity in the stock market by simply buying index fund. So I tend to agree with your investment agent. However, maybe you don't want to spend the time, and like to thought of gurranteed 6.5% per year. It is lower income in exchange of safety. It is up to you.
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