Turning what you have saved into steady income
Retirement income planning is about one question: when the paychecks stop, where does each month's money come from? We help you answer it in writing, with the tradeoffs laid out before anything is signed.
What retirement income planning means
While you work, a paycheck covers your bills. In retirement, that paycheck is replaced by a mix of sources. Some are steady and arrive every month. Others are a pile of money you draw down yourself.
Retirement income planning means matching those sources to your spending. The goal is that your essential bills are covered by income you can rely on, and the rest of your money is free for everything else.
Most retirees draw from some combination of these:
- Social Security. A monthly benefit for life, adjusted for inflation. When you claim changes the amount.
- Pensions. If you have one, a monthly payment set by your former employer's plan.
- Retirement accounts and other savings. 401(k)s, IRAs and similar accounts. Flexible, but nothing promises how long they will last.
- Work or rental income. Helpful, but it can stop when health or circumstances change.
- Annuities. An insurance contract that can turn part of your savings into income. Useful for some people, wrong for others.
The income gap
Your income gap is the difference between what you need to spend each month and the steady income you can expect, such as Social Security and any pension.
If your steady income already covers your essential bills, you may not have a gap at all. That is good news, and it often means you do not need an annuity. If there is a gap, the next question is how to fill it: drawing from savings, working longer, changing when you claim Social Security, adjusting spending, or using part of your savings to buy income guaranteed by the issuing insurer. Each choice has costs.
The estimator below does the simple arithmetic. It stores nothing and asks for no contact details.
Retirement income gap estimator
Educational estimate, not a quote.
Compare what you expect to spend each month in retirement with the income you expect to have. Everything stays on this page; nothing is saved or sent.
The math
| Monthly budget | $0 |
|---|---|
| Minus Social Security | $0 |
| Minus pensions and other income | $0 |
| Monthly gap | $0 |
Enter your monthly numbers above to see the difference.
Educational estimate, not a quote. This shows today’s monthly difference only. It does not account for inflation, taxes or changes in spending, and it does not estimate what any product would pay. A gap can be met in more than one way; a licensed agent can walk through the options with you before anything is signed.
Where annuities fit, and where they don't
An annuity is a contract with an insurance company. You pay the insurer a sum of money, called the premium. In return, the insurer credits interest on it and, if you choose, pays you income later, sometimes for the rest of your life.
Start with what you give up:
- Access. Most annuities have a surrender period, a number of years during which taking out more than a set amount costs you a fee.
- Upside. The fixed and fixed indexed annuities we discuss limit how much interest you can earn.
- Flexibility. Some income choices cannot be undone once payments start.
- Inflation. A level payment buys less every year that prices rise.
What you can get in return:
- Protection from market losses on the money in a fixed or fixed indexed annuity. The tradeoff is the limit on interest above. Surrender charges and optional fees can still reduce your value.
- Tax deferral. Interest is not taxed until you take it out. Withdrawals of earnings are then taxed as ordinary income.
- Income you cannot outlive, if you choose a lifetime income option. Guarantees depend on the insurer's ability to pay.
Whether that trade makes sense depends on your gap, your other savings, your health and how much access you need. Sometimes the honest answer is no. We wrote a whole page about when an annuity is not right.
The four pages in this section
Read them in order, or jump to the question you have.
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Fixed annuities
A set interest rate for a set number of years. Simple to understand. You give up access during the surrender period.
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Fixed indexed annuities
Interest tied to a market index, with limits. We explain caps, participation rates, spreads and surrender charges.
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Income for life
Income riders and lifetime payments: how they work, what they cost and what happens when you die.
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When an annuity is not right
The situations where an annuity is the wrong tool, and what to look at first.
How we approach it
- A conversation first. We listen. No recommendation and no application on the first call.
- A written fact-find. Your income, spending, savings, health, goals and how much access you need.
- Options in writing. If an annuity fits, we show side-by-side options, the costs, the surrender schedule and how we are paid. If one does not fit, we tell you.
- You decide on your own time. No pressure and no deadline from us.
Questions are free.
Book a 20-minute conversation, or send us a question by email. No cost, no obligation, and we never sell your information.