Annuities and mutual funds have long been the purview of retirement experts. The “diversification” advantage of mutual funds and the “guarantee” and “tax-deferral” features of annuities have attracted many investors, and as a result, both have experienced growth in the past decades. However, as popular as they are, are they really such a great deal for every investor? What should the investor know, to compare these two products? Due to the complexity of the products and pension participants' limited financial sophistication, additional information is required. Accordingly, McClelland's book meets the need to equip ordinary investors with “a general working knowledge of annuities and mutual funds,” which includes a careful and easy-to-understand description of these two products, factors to consider when making investment decisions, and sales strategies that investors should be aware of. Without a doubt, the author provide unique insights into both the mutual fund and annuities market.

The first section of the book offers general investment ideas. The author suggests that a diversified stock portfolio is the second best investment choice after real estate, and he argues that stocks are “on sale” now so represent good value. Next the book moves on to mutual funds, including their history, main features and types, and taxation. Most importantly, it reminds the reader that mutual fund fees should be a key aspect to consider when investing. While such fees clearly matter a lot, they are often overlooked or misunderstood by the common investor.

Subsequent material focuses on annuities, mainly deferred annuities and especially variable annuities (VA). The author suggests that only certain variable annuities are good investment choices for certain investors. For example, those who seek to guarantee a wealth level for their beneficiaries will prefer the variable annuity with a death benefit feature. For risk preferrers who will not select VAs as the primary source of retirement income in retirement, however, and who will not want to give up control of investment by annuitizing VAs later, the author argues that variable annuities with living benefit feature and thus high fees attached are not a good choice. A brief description of fixed annuities and index annuities follows. As an ordinary investor, I would find useful a more detailed description about what current annuity markets have to offer.

McClelland succeeds in helping common investors better understand the mutual fund marketplace as well as annuities. Yet the book does not give a completely comprehensive perspective, as it does not take into account other investment opportunities, the need for investors to use financial vehicles to hedge specific risks, restrictions associated with certain retirement saving accounts, and so forth. In some cases, a choice judged to be “bad” when considered in an isolated circumstance might actually be “good” if the investor's entire portfolio is taken into account along with personal preferences.