What is a key feature of variable annuities in retirement planning?

The key feature of variable annuities in retirement planning is that they allow for tax-free reinvestment of earnings. This means that any investment growth within the annuity can accumulate without being taxed until withdrawals are made, which provides a significant tax advantage for individuals saving for retirement. This enables investors to potentially grow their retirement funds more effectively over time, as they can reinvest the earnings without the immediate tax implications that would occur in other types of investment accounts.

Other aspects of variable annuities, such as their structure and payment options, can vary widely. However, the ability to defer taxes on earnings until withdrawal makes them an attractive option for retirement planning, allowing individuals to maximize their investment growth during their working years.