I’m 73 and my financial adviser told me to buy $1.5 million in annuities — should I do this?

Dear MarketWatch, 

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I have $1.5 million in my 401(k) and $1.1 million in my IRA. I will be 73 in 2024 and must start RMDs.

A financial planner suggested that I purchase $1.5 million in annuities and invest the other $1 million in stocks and bonds.

Should I take my adviser’s suggestion? Does this sound like good advice?

Related: I’m in my 30s with $30,000 in a 403(b). I’m facing a $20,000 college-tuition bill. Do I raid my retirement account or take out a student loan?

Dear Reader,

Retirement-income planning can feel like an overwhelming puzzle, but you have the pieces there — you just have to make sure you use them to your greatest advantage.

Annuities make sense in some circumstances, but you have to ask yourself a few questions before you proceed with any sort of advice or purchase, especially given how much money we’re talking about here.

The first, possibly biggest question you need to ask yourself: Is there an income gap you’re trying to fill? Annuities’ main purpose is to fill an income gap in retirement, and you can determine your shortfall after taking account of any guaranteed income you’ll have, such as a pension or Social Security. For example, if you’re a single individual who anticipates spending $60,000 a year in retirement, but your Social Security checks would only make up $25,000 of that, you have an income gap of $35,000. Your next step is to figure out where the rest of your money will come from, and that occasionally includes an annuity. It could also be an investment account, or it could be a mix of the two.

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Do you understand why this financial adviser is suggesting you put such a large amount of money in one type of product? Ask this professional what problem they’re trying to solve for, said Eric Nelson, a certified financial planner and president of…