Insuring your retirement

Popular retirement vehicles such as 401K and IRA just expose the average investor to raw equities/bonds with no guarantees. Even though these vehicles are for parking your money for the long term and they are tax deferred, there is no security net. Your retirement can go to $0 in theory.

When you buy a big ticket item like a house, car you get insurance. The money that you sock away for retirement is sacred and it makes sense that it should be insured too. Annuities offer exactly that. They provide insurance for the money you sock away for retirement. They are tax deferred. There are fixed income and variable annuities (backed by the equity market) depending on what sort of income you want upon maturity of your annuity. A fixed income annuity will give you fixed income which may not keep up with inflation. A variable annuity (backed by mutual funds) can give you more income but can also go down, but because these are packaged with insurance, you do get some money if things were to go sour when you were about to retire.

Annuities because of their inherent tax deferred nature are best handled outside a 401K and IRA

Here's an excellent article on Annuities from the SEC