The single biggest fear in retirement isn’t a market crash — it’s running out of money. Annuities exist to solve exactly that problem: they can convert a portion of your savings into a paycheck that lasts as long as you do.
What an Annuity Actually Is
An annuity is a contract with an insurance carrier. You contribute savings; in return, the carrier guarantees future income. Fixed and fixed-indexed annuities also protect your principal from market losses, which is why they appeal to people approaching retirement.
Who They’re Right for — and Who They’re Not
Annuities are an excellent fit for the portion of your savings you want protected and turned into reliable income. They’re a poor fit if you need full liquidity for that money. The right amount to annuitize depends on your essential expenses and other income sources.
The Bottom Line
Used well, an annuity covers your must-pay bills for life, letting the rest of your plan take sensible risk. Try our retirement income estimator, then let’s build a real projection together.