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When it comes to annuities, there’s a wide gap between perceived benefits and the number of actual annuity investors. Take a recent brief looking at individuals who have over $100,000 in investable assets: Over half want to invest in an annuity, but just 12% of those same people actually do. Why the disconnect?

There are lots of reasons—and plenty of misconceptions about annuities. Let’s take a deep dive at some of the most common annuity myths.

Myth: Annuities are only for retirees.

You don’t have to be near or in retirement to include an annuity in your retirement savings plan. Annuities exist for every life stage; in fact, those purchased by someone early in their working and saving years have a longer time to potentially grow. (Talk to your financial professional about the best option for you.)

Myth: Annuity gains won’t match market gains.

The performance of variable annuities is tied to the market performance of the underlying investment options. Registered index-linked annuities, or RILAs, are also based on the value of indices tied to the market, while offering some protection from market volatility. Even income annuities, which typically feature a fixed rate of return, may include step-up or bonus features that help to build future guaranteed income. However, the growth potential and benefits of an annuity depend on the type and on product details such as fees and/or caps rates. Product fees and cap rates may limit performance, but are tradeoffs for an annuity’s benefits.

Myth: Annuities don’t pay benefits after I die.

Annuities very often offer legacy planning options, enabling you to include them in your estate planning. In addition, annuity death benefits don't require underwriting (as opposed to life insurance) and benefits are paid outside of probate. Some annuities can also be set up as a trust for multi-generational estate planning. Check with your financial professional for options, including joint income for a surviving spouse.

Myth: Annuities have high fees and are expensive.

All retirement savings products have fees, and the costs vary based on the type of account. The same is true of annuities. The more features (or riders) you add, the more you may increase costs. Your financial professional can help you sort out the options.

Myth: Annuities are inflexible.

Again: Depending on the type of annuity, you may have more flexibility than you realize. Some have penalty-free withdrawal options, enabling you to take out a certain portion (typically about 10%) each year without a fee (called a surrender charge). Or, you may have an annuity that allows for withdrawal due to certain life events such as a hospital stay.

Annuities are not the only retirement savings account that triggers a charge based on early withdrawal—401(k)s, for example, do that too.

Myth: Annuities don’t have as many investment options as other retirement savings.

Annuities are often customizable to your goals and life stage, and that includes the variety of investment options.

Myth: There’s no tax benefit to purchasing an annuity.

When funded with after-tax (sometimes called nonqualified) dollars, annuities have no contribution limits. And the growth or earnings in annuities are also tax deferred until the owner makes withdrawals.

Myth: I already have a retirement savings account, so I don’t need an annuity.

Financial professionals generally counsel diversity when it comes to saving for retirement. For example, an annuity and Social Security may provide a guaranteed income stream, while withdrawals from an individual retirement account and 401(k) can give you some flexibility in withdrawing the amount you need.