Annuities have such a nice sound to them. Their very name suggests an annual income, security for your future, a retirement boon. But they take a lot of investigating and inquiry if you're thinking of adding one to your portfolio.

You can secure a fixed income for life with an annuity. The problem with this type of retirement vehicle is that inflation can erode the purchasing power of that income. Annuity purchases are also irrevocable. Which means you can't decide to cash them in without being hit with penalties, including surrender fees and charges for managing your money. Many salespeople conveniently overlook the fees involved when they sell you an annuity.

Despite the fact that a lot of people don't understand annuities, they continue to buy them--more than $1.5 million worth at last count.

Annuities, which are sold by insurance companies, are a lot like insurance policies. You pay a lump sum or a regular amount over a period of time, just like insurance premiums.

There are two basic types of annuities: fixed-rate and variable-rate.

You can begin to receive income monthly, quarterly, semi-annually, or annually immediately after making a lump-sum deposit. Income can be for life or a fixed number of years.

Make sure annuities are the right route for you to choose for your retirement income.



Watch for flood cars

The used car market throughout the U.S. is being flooded with cars that were damaged in the hurricanes that ripped through Florida during the past year.

Cars that have been totaled by flood waters -- any vehicle stuck in water for more than two days -- usually are auctioned off for parts.

But many of them find their way into the used-car market, primarily privately or in small car-lots in other states because tracking their origin becomes more difficult.

An estimated 40,000 such water-damaged vehicles were sold around the country after Hurricane Floyd hit in 1999.