Variable annuities allow you to invest in “subaccounts” that resemble mutual funds yet defer income tax until the money is withdrawn. The catch: high fees. On average variable annuities charge more than 2% per year for insurance, administration, and investment management. There usually are surrender charges for the first six or seven years, starting at 7% and gradually tapering off. Now, less-expensive variable funds are available, offered by mutual fund companies such as Fidelity, Scudder, and Vanguard. TIAA-CREF, the company that manages billions of dollars for educators’ retirement funds, offers a variable annuity with total expenses of 0.37% per year. (Call 800/223-1200 for details.) Low fees aren’t everything, though. You’ll want an attractive assortment of investment options and a sense that the company “plays fair” with investors. That is, if a special deal is offered to newcomers (a high yield, perhaps, or relief from surrender charges), is that same deal available to existing investors as well? Find out before you invest, because after that moment you become an existing investor, too!