Annuities Part 1- Clarification

In the January 5, 2009 report (Annuities-Part 1), NBR reported that the annuity of Maria Rojas pays out at a rate of 8 percent a year. That is correct, but the 8 percent is an "income rate"-- not an interest rate-- and includes part of her principal. Also, the report says immediate annuities may have high surrender fees. However, some immediate annuities do not allow withdrawing money for any reason. High surrender fees for cashing in an annuity's principal are more common with deferred and variable annuities.