Annuities are contracts between individual buyers and insurance companies or mutual fund companies. The concept is straightforward and easily understood. The annuity buyer pays the company a sum of money and the company agrees to pay it back often at a later time. This can provide a significant benefit for the purchaser by allowing him to defer income from his peak earning years to a later date when he is retired and earning less. It also can reduce the buyer's tax burden and make his reti...