When you're in your 60s, every decision you make about your money can feel high-stakes. After all, you're pretty close to retirement if you aren't retired already, and you don't have decades to invest and grow your wealth.

That's why it's important to be careful about the advice you follow and make sure that you're making the best investment choices that align with your goals.

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For example, let's pretend that Sarah and Fred attended a free seminar on investing for retirees, and the speaker billed himself as a financial professional with tips on helping seniors prepare for life without a paycheck.

The seminar speaker told the attendees that annuities can outperform stocks, and Sarah and Fred aren't sure whether his claims were accurate or whether they were sold a bill of goods. So, should Sarah and Fred sink their 401(k) or other retirement assets into an annuity, or are stocks the way to go?

Was the speaker giving Sarah and Fred bad advice or is it possible for annuities to outperform stocks?

"It depends on what you mean by outperform," Domenick D'Andrea (1), founder of DanDarah Wealth Management, told Moneywise. "If you are investing for the long term and we are in a bull market, then stocks will most likely outperform annuities. But annuities can outperform stocks in certain situations."

D'Andrea explained that annuities can offer both a lifetime guaranteed income and, in some cases, downside protection with a buffer that can potentially eliminate losses in a down market. "If you live a long life, or if we have a few years of down stock markets with a buffer in place, then annuities may outperform," D'Andrea said.

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The reality is, comparing annuities and stocks is hard because they are different financial products.

Annuities are a contract with an insurance company. You pay a lump sum or regular payments, and in exchange, the annuity can provide income immediately or in the future. Depending on the annuity type, it may guarantee a specific amount of income for a set period of time that could last as long as the rest of your life (or the rest of both spouses' lives for a joint-life annuity).

There are lots of different kinds of annuities. But as Gainbridge Financial (2) (which sells annuities to consumers) explains, average returns can range between 4% and 5% for fixed annuities or 6% to 8% for variable annuities.

Stocks, on the other hand, offer the chance to buy shares of companies. You can buy an ETF that tracks a market index, such as the S&P 500. Historically, the S&P 500 has delivered around 10% average annual returns (3) over the long-term, and these ETFs typically come with very low fees.

But, while the S&P may provide a better ROI on paper, there are more downside risks. If you put your entire portfolio into the S&P when you're retired you risk all your money being invested during a crash. In that case, you could be forced to sell when you need income and lock in losses. You have more growth potential, but you're also more exposed.

There are other differences as well. For example, annuities can have high fees, and stocks can be more liquid. The right option for Sarah and Fred will depend on what they're looking for.

So, how should Sarah and Fred decide whether to buy an annuity or invest?

"The first thing you should look at when deciding if you should purchase an annuity is what you are looking to get out of the product," D'Andrea told Moneywise.

"If you're looking for guaranteed lifetime income without worrying about outliving the account, then an annuity probably makes sense as part of your plan. If you're a conservative investor looking for a better return than a bank account, then a fixed annuity could make sense. Lastly, if you want tax-deferred growth on non-qualified money, then an annuity is a good idea."

But, if you want the most growth potential, are willing to take on more risk or are a confident investor who wants to take your chance in the market, then the stock market is likely a better bet. Sarah and Fred will have to think about their goals to see what makes sense for them.

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Dandarah Wealth Management (1); Gainbridge (2); Macrotrends (3)

This article originally appeared on Moneywise.com under the title: A seminar told a couple in their 60s annuities outperform stocks — a wealth manager says it's not that simple

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.