[tfehring]

Yes, they generally get wiped out by inflation. You can get annuities whose payments increase by a fixed amount every year, or that increase based on the performance of the S&P 500 or whatever, but AFAIK you can't get an annuity with inflation-indexed payments today. I agree that that limitation makes them pretty crappy. Inflation-indexed annuities used to be available (I think until 2010 or so), but companies broadly stopped selling them because hedging long-term inflation is expensive.

[BayesianDice]

In the UK at least it looks like you can still get inflation index-linked annuities - for example, there are entries in the Hargreaves Lansdown "best buy" tables for for RPI-linked annuities: https://www.hl.co.uk/retirement/annuities/best-buy-rates

But their starting income is less than half the income from the non-increasing annuity, presumably because of difficulty/expense in hedging inflation risk.