Which of the following is a common use of annuities in financial planning?

The correct answer highlights tax-deferred growth as a common use of annuities in financial planning. Annuities are designed primarily to provide income, particularly in retirement, while allowing the investment to grow without immediate tax implications. This means that the earnings on the money invested in an annuity are not taxed until they are withdrawn.

This feature of tax deferral is significant because it allows the investment to potentially accumulate more value over time compared to taxable investment accounts. For individuals planning for retirement, this can lead to greater income during their retirement years, as they can invest their money longer without the erosion caused by taxes.

While other options may involve financial planning in different contexts, they do not capture the essence of how annuities serve a specific and beneficial purpose in long-term investment strategies aimed at maximizing growth while minimizing immediate tax liabilities. For instance, home mortgage reduction, buying savings bonds, and estate clearance do not involve the systematic and ongoing investment strategies that annuities represent. Thus, tax-deferred growth is a key characteristic and advantage of annuities that particularly aligns with the goals of financial planning focused on wealth accumulation and retirement income.