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Annuity Basics
How Annuities Fit Into a Retirement Plan
Annuities work best as one piece of a broader plan — providing the guaranteed income foundation that supports the rest of your investments.
The "Income Floor" Strategy
Many retirement planners recommend building an income floor: combining Social Security, any pensions, and an annuity to cover essential monthly expenses. With essentials secured, the rest of your portfolio can stay invested for growth and discretionary spending.
Where Annuities Add the Most Value
- Filling income gaps — Between Social Security, pensions, and your true expenses.
- Reducing sequence-of-returns risk — Limiting reliance on portfolio withdrawals during down markets.
- Protecting against longevity — Income that lasts as long as you do.
- Supporting tax planning — Tax-deferred growth and flexible distribution timing.
- Providing emotional confidence — Less worry, more freedom to enjoy retirement.
Building a Balanced Plan
A well-built retirement plan rarely puts all assets into one product. Annuities are most effective when they complement — not replace — investments, savings, insurance, and Social Security strategy. The goal is balance: enough certainty to feel secure, and enough flexibility to enjoy retirement.