Annuities

Annuities are financial tools designed to help turn a portion of your savings into a reliable stream of income in retirement. Instead of managing a lump sum on your own, an annuity allows you to structure your money in a way that can provide consistent payments for a set period of time or even for the rest of your life.

Depending on the type of annuity selected, they may offer benefits such as tax-deferred growth, protection from market downturns, and optional income features that can be designed to fit your retirement needs. Some annuities focus on growth potential, while others prioritize income stability and preservation of principal.

One of the key concerns many retirees face is uncertainty, how long their money will last, how markets will perform, and what future income needs may look like. Annuities are designed to help address that uncertainty by creating structure and predictability around a portion of your retirement income.

In many cases, they can also be used to help “pensionize” savings meaning they help create a paycheck-like income stream you cannot outlive when properly structured.

The goal is not just accumulation, but distribution helping ensure your money is used in a way that supports your lifestyle throughout retirement. With the right design, annuities can offer a balance of safety, flexibility, and control over when and how your income is received.

Who Annuities May Be a Good Fit For

Annuities are not a one-size-fits-all solution, but they can be a strong fit for individuals who are looking to create more predictability and structure in retirement income.

They may be worth considering for people who:

• Are approaching retirement and want to turn a portion of their savings into steady income
• Are concerned about outliving their money in retirement
• Want to reduce exposure to market volatility on a portion of their assets
• Prefer a more predictable, “paycheck-style” income in retirement
• Are looking to supplement Social Security or pension income
• Want tax-deferred growth while they are still in the accumulation phase

Annuities are often used as part of a broader retirement strategy, helping to balance growth-focused investments with income-focused solutions. When structured properly, they can provide added confidence around essential income needs, while leaving other assets available for growth or flexibility.

Some retirees also choose to include additional features, known as riders, on their annuity contracts. Riders are optional enhancements that can be added to customize how a policy works.

One commonly used option is a long-term care (LTC) rider, which allows a portion of the annuity’s value to be accessed for qualifying care needs such as home health care, assisted living, or nursing care, depending on the contract.

This can be especially important for individuals planning ahead for potential future care needs, helping ensure that assets are available not only for income, but also for unexpected health-related expenses later in life.