If you max out your contributions in 401(k)s and IRAs, then variable annuity can be a way to enhance your retirement savings. Each person has different financial needs and goals, and thus, it is very important to consider all factors before finalizing on an annuity contract. Variable Annuities have the potential to provide more returns than fixed annuity but has much more risk too. Annuities are huge investment tools but one must consider its tax consequences, withdrawal penalties, and other administrator fees.