A variable annuity offers the potential for investment growth along with tax deferral, but at a higher cost compared to fixed annuities. With variable annuities, you can invest in subaccounts like mutual funds, and when ready, convert the balance into income payments. 

While the returns and income depend on investment performance, many insurers guarantee a minimum payout. However, these annuities often come with high fees and restrictions on early withdrawals. The best variable annuities have low fees, flexible withdrawal options, income guarantees, and are backed by financially strong companies. Here are three of the best options in the current market: 

• Lincoln Financials’ American Legacy Target Date Annuity, Annual Fee 0.10% to 0.90%
• Pacific Life’s Pacific Odyssey Variable Annuity, Annual Fee 0.30%
• RiverSource RAVA Vista Variable Annuity, Annual Fee 1.00%

Finsum: There is currently more value in annuities than there was a decade ago due to the risk levels compared to bond markets and the return profile.