Your own guaranteed paycheck for life
Fewer than 1 in 10 private-sector workers today have a traditional pension. An income annuity lets you turn part of your savings into guaranteed monthly income you can't outlive — on your terms, starting when you choose.
This is a simplified, hypothetical illustration only — not a quote. Actual payout rates vary by insurer, age, gender, contract type, and interest rate environment at the time of purchase. This is not a guarantee of any specific payment amount.
An income annuity is a contract with an insurance company: you convert part of your savings into a stream of guaranteed payments, and the insurer guarantees to pay you — for a set period, or for the rest of your life — regardless of what happens in the market or how long you live.
It works like the pension your parents or grandparents may have had through an employer, except you're the one funding it, and you control when income starts and how much of your savings goes toward it.
Income annuities aren't right for every dollar or every person. Here's a balanced look at the tradeoff:
This is exactly why a conversation with a licensed advisor matters — to see whether this fits alongside what you already have, not instead of it.
Income annuities are regulated insurance products, not a scam. Every state has an insurance department that regulates and oversees annuity contracts, and payments are backed by the issuing insurance company's claims-paying ability. That said, they're not right for everyone, which is why understanding the tradeoffs matters before committing any money.
This depends on the specific contract and any optional riders or guarantee periods selected. Many contracts offer options that protect a beneficiary in early years. This is exactly the kind of detail a licensed advisor should walk through with you before you decide.
Income annuities are generally designed for money you don't need immediate full access to, in exchange for guaranteed lifetime payments. Some contracts include limited liquidity features. This tradeoff — liquidity for guaranteed income — is the central decision to understand.
Self-directed withdrawals depend on your investments lasting as long as you do, with no guarantee. An income annuity shifts that longevity risk to an insurance company, which guarantees payments for as long as you live, regardless of how long that is or how markets perform.
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