Excellent question. No, I had not been looking at annuities. For my adult lifetime so far, annuities=bad but I don't know if that's the case any longer.
I pulled up a quick quote on immediateannuities.com and it looks like I (45 y/o M) could get 5.87% payouts on an annuity that starts 2 years from now and offers my beneficiaries 10 years of payments after my death. If I start the cashflows in 5 years the payout ratio goes up to 6.95%!
These kind of returns could shake up some assumptions about the Safe Withdraw Rate, and it is likely they'll only go higher by next year. First, it means if I could maintain spending discipline and not increase my costs each year 1:1 with inflation (e.g. own my home, have solar panels, not buy and discard lots of shite), I could in theory retire in today's world of uncertainty with a WR near 5%. Second, I could lock in a percentage of my future income and thereby reduce my vulnerability to SORR. Annuities could be more useful than long-duration corporate bonds in the sense that I will never have to reinvest - and potentially receive lower rates.
The downside to an annuity-based portfolio is that your return is fixed in nominal terms. If the future is high inflation, anything fixed income would be dead weight. E.g. your monthly payments which seem impressive now could be worth half as much purchasing power in 5 years. So you'd want to balance the risks of market volatility (stocks) against the risks of inflation (annuities, long-duration bonds). In theory, there is an optimal mixture that would carry a person through either the great depression or the great stagflation.
In terms of a parking lot for cash, annuities seem like a rather illiquid choice, as far as I can tell. It's hard to argue with 4.6% one year treasuries that can be bought and sold with ease.
