Retirees with a Guaranteed Income Are Happier, Live Longer
Everyone with savings can secure a lifetime income, and that goes a long way toward peace of mind in retirement.

Retirees who are surrounded by their family and friends — and who also have a substantial check coming in every month for the rest of their lives — are much happier, according to an articles published in Time and The Wall Street Journal. They also live longer, studies show.
That makes sense because the No. 1 worry of retirees is of running out of money. Individuals who have a set income for life remove a great deal of stress from their lives.
Retirees used to get enough money from Social Security and a traditional pension to cover their living expenses. But few employers now provide pensions, putting the onus of saving on the employee. Social Security payments equal only about 40% of the average wage earner's pre-retirement income.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Income That Lasts as Long as You Do
How can you get additional guaranteed income? Income annuities provide an often-overlooked solution. With income annuities, a lump sum or series of premium deposits is converted by an insurance company into an income stream that will begin either immediately, or in the case of deferred income annuities, at whatever future age you choose, typically starting no later than 85. Most annuities offer an option for guaranteed lifetime income. Many also let you name a joint income recipient so that your spouse can also receive a guaranteed lifetime income.
Research shows that annuities provide both psychic and financial benefits. Retired annuity owners feel more confident they’ll be able to afford their preferred retirement lifestyles — even if they live to age 90 or older — than retirees who do not own an annuity, according to a LIMRA Secure Retirement Institute study.
Some 73% of retirees who own an annuity believe they will be able to live the retirement lifestyle they want, compared with just 64% of retirees who don’t. Nearly 7 in 10 retirees who own an annuity are more confident their savings and investments will not run out if they live to age 90, compared with 57% of retirees who don’t own an annuity, the 2016 LIMRA survey found.
An annuity offers a solution for creating long-term income security along with the happiness that goes along with that.
Don’t Invest Unless It’s Right for You
Annuities are powerful, but they’re not for everyone. Don’t invest unless you know it’s the right product for you.
Before buying, ask yourself:
- How much income will I need in addition to Social Security and other sources to cover my expenses?
- Will I need supplemental income for anyone else besides myself?
- How long do I plan on leaving money in the annuity?
- When do I expect to need income payments?
- Will I be able to gain access to the funds from the annuity if I should need them?
- Do I have enough cash reserves to meet my expected needs?
- Am I using the funds to save for retirement, to generate a retirement income — or both?
Once you’ve decided that an annuity is the right choice, then you can decide which type would be best. There are many different types of annuities available in the marketplace today, so knowing how you plan to use the product, will help you to make the best choice.
Many annuities offer a guaranteed interest rate and guaranteed principal. Most variable annuities, however, offer a chance at higher returns but don’t guarantee earnings or principal. Immediate annuities begin paying out income within one year, while deferred annuities let you make deposits for many years before you start taking out an income stream.
Just like a car, there are lots of models that can get you from Point A to Point B, but the one that's best for your specific needs will depend on its particular features and benefits.
An annuity can be bought with a lump-sum payment using cash or by rolling over funds from an IRA, 401(k) or another retirement account. You may also choose to make a series of regular, smaller deposits over time. Until you make withdrawals, you pay no tax on earnings.
A secure retirement depends on having enough dependable income for your lifetime to meet your basic needs and afford the extras that make life enjoyable. A lifetime income annuity can supplement Social Security and take the worry out of retirement because your monthly payments are guaranteed to keep coming even if you live past 100.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Retirement-income expert Ken Nuss is the founder and CEO of AnnuityAdvantage, a leading online provider of fixed-rate, fixed-indexed and immediate-income annuities. Interest rates from dozens of insurers are constantly updated on its website. He launched the AnnuityAdvantage website in 1999 to help people looking for their best options in principal-protected annuities. More information is available from the Medford, Ore., based company at www.annuityadvantage.com or (800) 239-0356.
-
How to Survive Market Mayhem
2025 is turning out to be a turbulent year for the market, but don't panic. Here are four ways investors can ride out the storm.
By Jeffrey R. Kosnett Published
-
Will Your State End Tax on Tips This Year?
State Tax While President Trump spearheads federal talk on tips, several key states are considering ending taxes on tip income.
By Kate Schubel Published
-
Alternative Investments Under Trump: What You Need to Know
As access to alternative markets opens up, retail investors looking to enhance their long-term financial outcomes have more opportunities to carefully consider.
By Henry Yoshida Published
-
Beware of TV/Billboard Personal Injury Law Firms: Here's Why
If you or someone you know is tempted to hire a so-called settlement mill to handle a personal injury case, here are some reasons to reconsider.
By H. Dennis Beaver, Esq. Published
-
How Small Businesses Can Clear the Economic Hurdles Ahead
Shifting rules on taxes, trade and regulation are creating uncertainty for SMBs. Owners can overcome that by focusing on efficiency, flexibility and investment.
By Mark Valentino Published
-
10 Tax Topics Every Retiree Should Know About
A little knowledge can go a long way toward saving on your tax bill. Print this out and take it to your tax planner so you can have a productive chat.
By Michael Miller Published
-
Facing a Layoff? Ask Your Employer These Questions Now
If you're being laid off or forced into early retirement, don't make any decisions without proper guidance — and that starts by asking some key questions.
By Ben Maxwell, ChFC®, AAMS® Published
-
Have $1M+ Saved? Consider a Financial Planning One-Stop Shop
A 'one-stop shop' team — including a financial planner, estate planning lawyer, CPA and more — could serve all of your tax, estate and retirement planning needs.
By Joe F. Schmitz Jr., CFP®, ChFC® Published
-
Five Ways to Safeguard Your Portfolio in Market Downturns
The stock market is nothing if not volatile these days. When it takes a dip, a well-managed, properly diversified portfolio could help you ride out the storm.
By Joel V. Russo, LUTCF Published
-
This Underused IRA Option Offers Tax Benefits and Income Security
Looking to avoid running out of money in retirement? Consider longevity protection provided by a QLAC as a component of your retirement income plan.
By Jerry Golden, Investment Adviser Representative Published