Answer:
You are correct in saying retirement annuities have come under fire from the media lately. However, eager to get alarmist stories on the front pages (bad news always sells) journalists tend only point out what they need to make their case and often the "balanced view" becomes a victim of self serving interests.

RA's were developed about forty years go to provide a portable pension fund for self employed people or people who's company didn't provide them with a pension. As a portable pension fund, the receiver of revenue at the time decided that the monthly contributions should be deductible from tax to encourage people to save for their retirement.

If you are the type of person that has little will power and you continually raid your savings for impulse buys then an RA is a great way to stop you falling prey to “newcaritis”.

In addition if you are self employed and your business fails, creditors cannot attach these funds, even if you are sequestrated.

Tax deductible vehicles

If you start investing in an RA, you must know that these funds cannot be accessed until you are 55, so you are in for the long haul. If you have a temporary hiccough and you can't pay the premium, you can take a break and resume payments at a time when you have more cash, however this is not advisable.

RA's are also tax deductible: you can invest 15 percent of your taxable income into an RA and deduct it from tax. This means that the absolute minimum tax deduction is 18 percent and the highest is 40 percent. What this really means for you is that even if the fund doesn't have any growth, you will at the absolute minimum have made an 18 percent return on your investment!

An RA should be part of your overall investment strategy. Unit trust based RA's are the best route to go, but you will need a financial advisor to guide you towards the right mix of unit trusts.