NEW YORK (CNN/Money) - My husband and I are 75 years old and have $40,000 we would like to invest in an annuity. Every annuity sales person we talk to promises the moon. But when we look at the fine print, we find the pitch is misleading. Any suggestions?

-- Bertha Strakes, Mesa, Arizona

My first suggestion is that you keep reading the fine print. Annuities, which are essentially investments issued by insurance companies, are among the most complicated, confusing and downright confounding investments I have ever come across.

And no matter what any broker, financial planner, insurance agent or sales person tells you about annuities in general or one annuity in particular, you should always read the fine print in the contract or prospectus to be sure you fully understand what you're getting into.

Fail to do that, and you may find yourself tripped up by surrender fees, annual charges and any number of other complications that can dramatically affect how much you will earn on your investment.

But even though I consider annuities some of the most complicated, confusing and downright confounding investments on the planet, they also have some advantages. So it is possible that an annuity can play a role in your portfolio.

That depends, however, on the type of annuity you're talking about, and assumes that you understand the tradeoffs involved.

For example, one breed of annuities -- fixed annuities -- operates much like bank CDs in that they offer guaranteed rates of interest and security of principal. In fact, fixed annuities can sometimes offer higher yields than you'll find on CDs at your local bank. What's more, they have a neat little tax advantage: the interest they pay escapes taxation until you pull it out of the annuity.

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Another version of annuities -- variable annuities -- work more like mutual funds. They allow you to invest in anywhere from a half dozen to 20 or so stock or bond portfolios known as "subaccounts," many of which are actually modeled on well-known retail funds. As with fixed annuities, the gains in variable annuities are sheltered from taxes until you withdraw them from your account

But both these annuities also come with several drawbacks. In the case of fixed annuities, for example, the rate you're quoted is typically good for only one year. After that, the insurance company can set it pretty much wherever it likes, although most annuities do guarantee a minimum annual return of 3 percent or so.

Variable annuities, on the other hand, often carry burdensome annual fees that can erode the benefit of tax-deferral and drag down returns. And both fixed and variable annuities usually come with surrender charges for early withdrawals that typically start at 7 percent but can go to 10 percent or higher.

There's yet another type of annuities I haven't even touched on here -- "payout" or "immediate" annuities. This version of annuities essentially allows you to convert a lump sum of money into monthly payments that can last for the rest of your life (or as long as you or your spouse are alive).

But there are plenty of complications here too, starting with whether you should choose a monthly payment that's fixed or one that can fluctuate month to month. The fixed payment gives you the assurance of knowing how much you'll get each month but leaves you vulnerable to inflation. The variable payment offers less certainty. But because its value is tied to investments pegged to the stock market, the variable payment can grow over time and increase your purchasing power.

If you'd like to learn more about evaluating annuities -- and I certainly think you should if you're considering investing forty thousand bucks -- I suggest you take a look at another column I wrote on annuities earlier this year.

And if that's not enough to whet your appetite, you might also want to check out sites such as Annuity.net, WebAnnuities.com and AnnuityNetAdvisor.com.

Oh, and one more thing: keep reading that fine print!

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "Investing for the Financially Challenged." He can be seen regularly Monday mornings at 8:40 am on CNNfn.