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Annuities aren't exactly flashy, but have been quietly gaining popularity over the past year, and for good reason. With over the last couple of months and interest rates still elevated, and with rather than the exception, a large number of soon-to-be retirees are trying to find ways to better secure their retirement portfolios. , in particular, as a safe way to lock in guaranteed retirement income.

But if you've started , you've likely run into a key question: Should you go with a fixed annuity or a variable one? After all, both annuity options are designed to provide long-term income, so they can both be worth considering as part of . However, these two annuity options operate in very different ways, and in today's unusual economic climate, where questions about interest rates and inflation loom large, the distinction matters more than ever.

So, is a fixed or variable annuity the smarter move this August? Here's how each product fits into today's climate — and how you can determine which one makes sense for your situation.

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Both fixed and variable annuities have distinct advantages in today's market. The better option, though, depends largely on your risk tolerance, time horizon and how you view the current interest rate environment. 

If you're prioritizing safety and guaranteed returns, fixed annuities may offer a strong value proposition this month, largely due to the current interest rate environment. Because rates remain elevated, insurance companies are offering competitive fixed annuity yields right now, and it's easy to find or higher.

High rates aren't the only benefit of fixed annuities, however. These types of annuities function similarly to a CD. You invest a lump sum and receive a predictable, set rate of return for a specific period. That means there's no exposure to market or rate volatility, which can be comforting for near-retirees or conservative savers who want to lock in today's higher rates before they fall.

In fact, many fixed annuities are outperforming traditional fixed-income options like Treasury bonds or right now. And the Fed has signaled that rate cuts may be coming later in the year, so locking in a solid guaranteed return this August could be a timely move.

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Variable annuities, on the other hand, present a compelling alternative for those willing to accept market exposure in exchange for growth potential. Unlike fixed products that cap your returns, variable annuities allow you to participate in market gains through various investment sub-accounts, potentially delivering returns that far exceed what fixed rates can offer.

While it may seem counterintuitive, the current high-rate environment actually strengthens the case for variable annuities. As rates decline, , the opportunity cost of choosing guaranteed returns over market-linked growth becomes more pronounced. Variable annuities also offer more flexibility in terms of investment options and income timing, allowing you to adjust your strategy as market conditions change.

For younger investors or those with longer time horizons, variable annuities can provide inflation protection that fixed products simply cannot match. While a 5.5% guaranteed rate sounds appealing today, and while it can be a great rate over the long term, it's still important to remember that inflation can erode purchasing power over time. But variable products, particularly those with equity exposure, historically provide better long-term inflation hedging.

If you're trying to decide whether a fixed or variable annuity is the better option for you, start by asking these key questions:

There's not one annuity option that works best for everyone, especially in today's economic environment. Fixed annuities could be a strong play in August for those seeking guaranteed returns before interest rates potentially fall. Variable annuities, meanwhile, may appeal to those who want to tap into the market's upside and can tolerate the risk that comes with it.

Whether you're approaching retirement or just trying to create future income streams, though, the key is choosing the annuity that aligns with your goals and risk comfort. And if you're considering either this month, now is a good time to shop around, because today's rates and market conditions won't last forever.