When it comes to retirement planning, one of the most important—and often overlooked—concepts is guaranteed income for life. Today, I want to dive into this idea and show you how you can create a steady paycheck in retirement, one that you can depend on no matter what happens in the markets.
Why Income Matters
I can’t tell you how many times I’ve met clients who have done an incredible job saving for retirement—they’ve built up significant wealth. Yet, when we start talking about their day-to-day finances, they feel anxious and uncertain. Why? They don’t have a plan for income.
These folks are used to the rhythm of a steady paycheck during their working years, and suddenly, that’s gone. They’re reluctant to touch their investments because they fear running out of money. That’s where tools like annuities come into play.
What Are Annuities?
An annuity is essentially a contract with an insurance company. You put in a portion of your savings, and in return, you receive guaranteed income payments for life. These payments can start immediately or at a future date of your choosing.
Here’s the key: once those checks start, they don’t stop—whether you’re single or married. For couples, the income lasts as long as either person is alive.
Immediate vs. Deferred Annuities
There are two main types of annuities we use to create income:
- Immediate Annuities: Start paying you income right away.
- Deferred Annuities: Let your money grow for a few years before the income kicks in, often providing higher payouts later.
For example, a 65-year-old couple who invests $100,000 in a deferred annuity could start receiving over $11,000 annually by age 70. The income continues for life, no matter how long they live.
Flexibility and Additional Benefits
One of the features I love about certain annuities is their flexibility. You don’t have to lock in a specific start date upfront—you can decide when the income begins based on your needs.
Some policies also include enhanced benefits, like doubling your income if you can’t perform two of the six activities of daily living. While this isn’t a replacement for long-term care insurance, it’s a helpful safety net.
A Part of the Bigger Picture
It’s important to understand that annuities are not a complete financial plan—they’re a tool within a plan. I would never recommend putting all your retirement savings into annuities. Instead, we typically allocate a portion, often from the “fixed income” part of your portfolio.
This strategy provides guaranteed income while keeping the rest of your investments in the market for growth. That way, you can enjoy the security of a steady paycheck while staying invested for the future.
Real-World Examples
We’ve helped clients at all wealth levels incorporate annuities into their retirement plans. Whether it’s $100,000 or $1,000,000, the principle remains the same: create reliable income you can’t outlive.
For couples or singles who are ready to retire, or even those planning 5–10 years ahead, we can customize a strategy that meets your specific needs.
Let’s Talk About Your Plan
If you’re tired of worrying about how to replace your paycheck in retirement, I encourage you to consider annuities as part of your financial plan. They’re not the only solution, but they’re a powerful one that can give you peace of mind and help you enjoy the retirement you’ve worked so hard to achieve.
Want to explore your options? Let’s chat! Together, we’ll design a plan that ensures your retirement income lasts a lifetime.
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