The importance of annuities lies in their ability to mitigate the risk of outliving one’s savings, a common concern given increasing life expectancies. They offer financial stability and peace of mind by guaranteeing income, regardless of market fluctuations or economic conditions. There are different types of annuities, including fixed, variable, and indexed, each catering to varying risk tolerances and financial goals. Fixed annuities provide a stable, guaranteed payout, while variable and indexed annuities offer the potential for higher returns linked to market performance. Overall, annuities enhance retirement planning by offering diversification, security, and a hedge against longevity risk, thereby ensuring a more secure and comfortable retirement.