Annuities are somewhat controversial because some come with high fees and they may not pay off as much as other investments. But some retirement specialists believe annuities have their place because they offer peace of mind: They act as insurance policies that protect retirees from outliving their income.

Annuities offer a measure of protection against market downturns, may provide a guaranteed investment return and grow tax-sheltered until you withdraw the money. They also have surrender charges if you withdraw your money from the account in the first six to eight years. Some annuity providers offer bonuses as an incentive to get you to transfer to their variable annuity product.

To be sure, the variable annuity landscape has been changing. In fact, there have been recent changes that insurance companies have made that affect existing policyholders.

Some financial professionals say they have seen more changes in the industry in the last year than in the previous five combined and that many contract owners do not understand what they own or how these changes affect them.

It is all obviously quite complicated. So the question that needs to be asked is: Is an annuity a good investment in a retirement plan?

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