Final answer:
Variable annuities allow investors to choose their own investments and can provide the potential for investment growth which may offset the effects of inflation on retirement income (b).
Step-by-step explanation:
Among the options provided regarding variable annuities, the true statement is that they allow investors to choose their own investments. Variable annuities provide a way for retirees to save for old age, with the potential for growth based on market performance. Unlike fixed annuities, which provide a guaranteed income, variable annuities offer a range of investment options and are subject to market fluctuations. Therefore, they do carry associated fees and are affected by market performance.
It's important to note that while different retirement strategies such as pensions, known as defined benefits plans, offer fixed payments over time, these can be at risk of losing purchasing power due to inflation. Contrastingly, variable annuities can provide the potential for investment growth, which can help hedge against inflation over time, but also come with risks associated with the financial markets.