Annuities Annuities are complex and often a very misunderstood retirement solution. There are many types of annuities: variable, fixed, immediate, and index to name the most common. Very often all these types are lumped together which many times gives them a negative connotation. Very simply, annuities should be used to solve a very specific solution, typically tax deferral or guaranteed incomeWhen one purchases an annuity, one is giving money to an insurance company and the insurance company is assuming the risk a consumer would ordinary assume. Because the insurance company is assuming a risk that a consumer would like to pass on there is a fee, consumers must access if the fee is justified for the risk assumed.