Seriously, an annuity is GIVING your money to a company and letting them dole out a set amount to you every month. If they invest it well, they keep all the windfall. If you die in a year, they keep it all. If inflation hits 15%, you may or may not get an monthly increase, depending on the fine print you sign when you GIVE YOUR MONEY AWAY.
The correct solution: keep tight control of your money. Learn about the stock market. You worked hard to save it. Now work hard to manage it and make it grow.
Not necessarily. Some contracts let you share in any gain; some have survivor provisions; most will have provisions that are incomprehensible to an ordinary investors, and most are probably bad deals for most folks. Some can protect principal but at the risk of inflation. And if you don't want to leave any when you die, it can be a way of making sure that happens (and again, not all contracts).
I wouldn't put it in the category of a scam because you do get what you pay for - a guaranteed income for life. But the end result is that now somebody else is building wealth off of your nest egg and handing back to you what amounts to just a modest dividend.
I have an elderly family member who took early retirement some 30 years ago after her husband passed away. Now she's in her late 80s and while she'll never starve, her money situation is always tight. Had she invested in a mix of stocks and bonds, she would certainly be a millionaire today given the 30 years of mostly bull market conditions.