Variable annuities are a type of investment product typically used for retirement planning. They are a form of annuity contract that allows for the accumulation of funds on a tax-deferred basis, with the option to receive periodic payments in the future. Unlike fixed annuities, the returns on variable annuities are not fixed and can fluctuate based on the performance of the underlying investment options, which often include mutual funds. This means that the value of the annuity can potentially increase or decrease over time, depending on the performance of the chosen investments. Variable annuities also typically offer a range of investment options, allowing the annuity holder to allocate their funds across different asset classes based on their risk tolerance and investment objectives. However, it's important to note that variable annuities often come with higher fees and expenses compared to other types of annuities, and they may also have surrender charges if the annuity is surrendered within a certain time frame. Additionally, variable annuities can provide a death benefit, which guarantees that a beneficiary will receive a specified amount upon the annuitant's death, regardless of the performance of the underlying investments. Overall, variable annuities can be a complex and potentially beneficial tool for retirement planning, but it's crucial for individuals to carefully consider their financial goals, risk tolerance, and the specific terms and features of the annuity before making a decision to purchase one.