Who May Benefit From Guaranteed Lifetime Income?
Evaluating the Fit
As you evaluate guaranteed income, the important question is not whether it is broadly attractive, but whether its benefits and tradeoffs fit your needs, resources, priorities, and broader retirement plan.
When you want a more dependable income floor
If you want more of your essential expenses supported by Social Security, pensions, and contractual income, you may want to explore whether a SPIA could help close the gap between the dependable income you already have and the amount you would like to rely on each month.
When longevity is a meaningful concern for you
If the possibility of living longer than expected creates concern about how long your assets may need to last, lifetime income can transfer a portion of that longevity risk to an insurance company, although the value of that protection should be considered alongside your health, family longevity, other income sources, and personal priorities.
When simplicity has value in your retirement plan
If you prefer having a predictable payment arrive without making as many ongoing distribution decisions, contractual income may give you a degree of simplicity that feels useful, provided you are comfortable with the reduced access to principal that comes with that choice.
When you may want to give caution greater weight
If you expect to need substantial liquidity, have limited health or longevity expectations, place a high priority on inflation protection or legacy, or already have enough guaranteed income to cover your needs, a SPIA may be less compelling, which is why preserving adequate liquid reserves should remain part of the decision.
Frequently Asked Questions
Is there a “right age” for you to buy a SPIA?
There is no single age that is appropriate for everyone, because your income rates, health, retirement timing, other resources, and planning goals all matter.
Should you annuitize all of your retirement savings?
Concentrating too much of your savings in an illiquid income contract can reduce your flexibility, so the appropriate amount, if any, should be evaluated within your individual plan.
Does the insurance company you choose matter?
Yes. Your contractual 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.