Investments can be complicated and potentially risky ventures. The notion of your own retirement and financial well-being in your later years being "risky" or "complicated" is going to introduce fear into anyone who is making choices now that will impact their retirement savings - if you're thinking about investing for your retirement, you need to understand what your available options are and how they can impact your future.

Two of the most common investment strategies for retirement are the annuity and the 401k plan. A lesser known option is the 401k Annuity. Depending on your personal needs and requirements, one of these options is likely to be a good fit - but which one?

First, let's look at some basic definitions of each of the modes of investment being mentioned here, courtesy of investopedia.com.

Investopedia Annuity explanation:

"A financial product sold by financial institutions that is designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time. Annuities are primarily used as a means of securing a steady cash flow for an individual during their retirement years. "

Annuities can be structured and created to ensure that payments will continue for so long as the annuitant or their spouse is living, or, they can be structured to payout money for a predetermined fixed amount of time. Two popular and common annuity types are the fixed and variable annuities. Fixed annuities guarantee a pre-determined amount of income per month for the rest of your life. Variable annuities base the monthly payments you would receive on the performance of an underlying portfolio of stocks and bonds. Here are some further details about annuities, courtesy of investopedia.com:

"Annuities can be structured to provide fixed periodic payments to the annuitant or variable payments. The intent of variable annuities is to allow the annuitant to receive greater payments if investments of the annuity fund do well and smaller payments if its investments do poorly. This provides for a less stable cash flow than a fixed annuity, but allows the annuitant to reap the benefits of strong returns from their fund's investments. "

Investopedia 401(k) Plan explanation:

"A qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions on a post-tax and/or pretax basis. Employers offering a 401(k) plan may make matching or non-elective contributions to the plan on behalf of eligible employees and may also add a profit-sharing feature to the plan. Earnings accrue on a tax-deferred basis. "

Typically, there are limits in place as to how much you are legally entitled to contribute, these limits, or caps, are usually pre-determined by the IRS or stipulations of the 401k plan itself. Depending on the details of your plan, there are likely going to be restrictions and conditions regarding withdrawing the assets, and like most plans, there will be penalties for early withdrawal (*accessing the funds before retirement age).

Some 401k plans have emerged with a new option which utilizes features of both the original 401k and annuity plans - the 401k Annuity.

What this basically breaks down to is: employees can invest a portion of their standard 401k contributions in an annuity that will provide guaranteed income after retirement. The main difference here is that the employee can invest as much as they like per month or pay period.

If you are a part of the workforce that does not have a traditional pension, then one of the options outlined here may suit your needs.