Who May Benefit From Guaranteed Lifetime Income?
Evaluating the Fit
Guaranteed income may be valuable in some retirement plans, but appropriateness depends on needs, resources, preferences and tradeoffs.
People seeking a dependable income floor.
Someone who wants essential expenses supported by Social Security, pensions and contractual income may consider whether a SPIA can help close a gap.
People concerned about longevity.
Lifetime income can address the risk of living longer than expected. The value of that protection depends on health, family longevity, other income sources and personal priorities.
People who prefer simplicity.
A predictable payment can reduce the number of ongoing distribution decisions. That simplicity may be meaningful, but it should be weighed against reduced access to principal.
When caution deserves extra weight.
A SPIA may be less compelling when liquidity needs are high, health or longevity expectations are limited, inflation is a primary concern, legacy is a dominant goal, or sufficient guaranteed income already exists. A careful review should also preserve adequate liquid reserves.
Frequently Asked Questions
Is there a “right age” to buy a SPIA?
No single age is appropriate for everyone. Income rates, health, retirement timing, other resources and planning goals all matter.
Should all retirement savings be annuitized?
Concentrating too much in an illiquid income contract can reduce flexibility. The appropriate amount, if any, requires an individual analysis.
Does insurer selection matter?
Yes. Guarantees rely on the issuing insurer’s financial strength and claims-paying ability.
Annuities are insurance contracts intended for retirement or other long-term needs. Contractual guarantees are based on the claims-paying ability of the issuing insurance company. Annuity payments and available features vary by contract. Annuities may have limited or no liquidity after annuitization. This material is intended for general informational and educational purposes and is not a recommendation for any specific individual or situation. Guardian, its subsidiaries, agents and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.