Retirement is supposed to be a time of relaxation, travel, and enjoying the fruits of decades of hard work. But for many retirees—even those with significant savings—the transition from earning a paycheck to living off investments can be stressful.

The biggest concern we hear from retirees is:

“I don’t have any income.”

Even people with millions in retirement accounts struggle with the idea of spending their savings. The shift from accumulating wealth to drawing from it creates financial anxiety and can lead to poor decision-making.

In today’s Cardinal Lesson, we explore why guaranteed income can dramatically increase retirement satisfaction—and how to create a reliable paycheck for life.

The Retirement Spending Dilemma

Once you retire, your regular paycheck stops. At this point, you have a few choices:

1️⃣ Spend freely and hope for good investment returns – But what happens if the market crashes or returns are lower than expected?

2️⃣ Spend conservatively to preserve assets – This can lead to underspending, missing out on the best years of retirement out of fear of running out of money.

3️⃣ Convert a portion of savings into guaranteed income – This provides a reliable stream of income that continues for life, much like a paycheck.

👉 Studies show that retirees with guaranteed income feel more financially secure and enjoy their retirement more.

What the Research Says About Guaranteed Income

Academic research supports the idea that guaranteed income leads to greater retirement satisfaction.

📊 Key Findings from Leading Studies:

✅ University of Michigan (2020) – Retirees with more guaranteed income report higher happiness levels.
✅ Society of Actuaries (2012) – Longevity risk is a major concern, and guaranteed income helps mitigate this uncertainty.
✅ Brookings Institution (2015) – Higher earners tend to live longer, making guaranteed income even more critical.

These studies confirm what we have seen firsthand: Retirees with a structured income plan experience far less stress and enjoy their retirement more fully.

How to Structure a Retirement Income Plan

Many retirees mistakenly believe they need to rely entirely on investment withdrawals. But a well-balanced plan includes multiple income sources:

✔️ Social Security – A foundational income source, but often not enough by itself.
✔️ Guaranteed Income from Annuities – Provides a reliable paycheck for life.
✔️ Investment Withdrawals – Can supplement income but are subject to market fluctuations.
✔️ Pension (if available) – A valuable source of predictable income.

Rather than spending retirement worrying about the next market downturn, a portion of your savings can be converted into protected lifetime income.

Real-Life Case Studies

Let’s look at two very different retirees and how they structured their income for security and peace of mind.

 High-Net-Worth Individual ($10-$11 Million in Savings)

• This retiree had ample assets but felt uneasy about spending down investments.
• He structured an annuity plan that provided $20,000 per month for life using just 30% of his portfolio.
• The remaining 70% stayed invested, providing long-term growth and legacy potential.

 Moderate-Income Retiree ($700,000 in Savings)

• He and his spouse received $5,000/month from Social Security but needed $8,000 to cover expenses.
• Used $500,000 to secure $3,000/month in guaranteed income, leaving $200,000 in investments for emergencies and inflation.

Both retirees achieved financial peace of mind by incorporating protected lifetime income into their retirement plan.

Why Longevity Risk Should Be a Top Concern

A major challenge in retirement planning is not knowing how long you’ll live.

📌 According to the Society of Actuaries:
✔️ A healthy 65-year-old woman has a 50% chance of living to 91.
✔️ A healthy 65-year-old man has a 50% chance of living to 89.
✔️ A healthy couple (both age 65) has a 25% chance that one spouse will live to 95.

Many retirees underestimate their lifespan, basing it on their parents’ longevity. However, improved healthcare and lifestyle changes mean people are living longer than ever.

Final Thoughts: A Smarter Approach to Retirement Income

 Key Takeaways:

 Retirees who have guaranteed income feel more confident and spend more freely in retirement.
 Longevity risk is real—planning for a 30+ year retirement is crucial.
 Annuities provide a stable, market-proof income stream that retirees can count on.
 It’s NOT an “all or nothing” decision—a balanced plan incorporates both investments and guaranteed income.

Retirement is meant to be enjoyed, not stressed over. Let’s create a plan that ensures you never have to worry about running out of money.

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