Annuities 101: Guaranteed Income for Life
Annuities 101: Guaranteed Income for Life
Sleep well knowing your income won’t.
“The best investment on earth is peace of mind.” — Warren Buffett
Retirement isn’t just about saving—it’s about spending confidently. It’s about knowing your money will last as long as you do. That’s where annuities come in: financial tools built specifically to deliver guaranteed income for life.
While annuities are often misunderstood or overlooked, they’ve become a cornerstone strategy for smart retirees who want to avoid running out of money in their later years.
If you’ve ever worried about outliving your savings or wish you could create your own pension, this blog is for you.
🔍 What Is an Annuity?
An annuity is a contract between you and an insurance company. You contribute money (either in a lump sum or over time), and in return, the insurer promises to pay you income—either now or in the future.
There are two key phases:
Accumulation Phase – where your money grows
Payout Phase – where your annuity pays you income, often for life
Annuities are customizable and come in different types, depending on your needs.
🧾 The Primary Benefits of Annuities
✅ Guaranteed Income for Life – you’ll never outlive your paycheck
✅ Tax-deferred growth – earnings grow without annual taxes
✅ Protection from market losses – with certain types like Fixed Indexed Annuities (FIA)
✅ Legacy options – pass unused funds to your beneficiaries
✅ Custom payouts – monthly income, joint payouts, inflation protection
Whether you want to supplement Social Security, replace a pension, or guarantee your spouse’s income, annuities offer flexibility and peace of mind.
📊 The Main Types of Annuities
| Type | Best For | Risk Level |
|--------------------------|-------------------------------------------|---------------------|\n
| Fixed Annuity | Predictable interest & safety | Very low |\n
| Fixed Indexed Annuity| Market-linked growth without losses | Low |\n
| Variable Annuity | Higher growth with investment risk | Medium to high |\n
| Immediate Annuity | Turning a lump sum into instant income | Very low |\n
| Deferred Income Annuity| Income that starts in the future | Very low |
Most retirees prefer Fixed or Fixed Indexed Annuities (FIA) for their guaranteed income and principal protection.
🏦 What Is a SPIA?
A SPIA (Single Premium Immediate Annuity) is ideal for those who want to turn a lump sum into a steady paycheck—right now.
You deposit a certain amount (e.g., $250,000), and the insurer immediately begins paying you a guaranteed income stream, often for as long as you live.
Perfect for retirees who:
Want simple, dependable monthly income
Don’t want to manage investments anymore
Are worried about outliving their money
🔐 What Makes Annuities Unique?
Unlike 401(k)s or IRAs alone, annuities can:
Guarantee income regardless of market conditions
Ensure payouts continue for life (even if you live to 100+)
Protect your spouse with survivor benefit options
Avoid sequence-of-returns risk (the danger of retiring during a market drop)
Complement other retirement income sources for predictable, layered protection
You’ve saved your whole life. Now you need a strategy to spend confidently.
📘 Real-World Example: Creating a Personal Pension
Steve and Karen, both age 67, retire with $600,000 in savings. They invest $300,000 into a Fixed Indexed Annuity with an income rider.
They start collecting $28,000/year—guaranteed for life
Their remaining savings remain invested
They have peace of mind knowing their basics are covered without market risk
Now, the rest of their retirement income can come from Social Security, RMDs, or flexible investments.
🧭 KEyO Insurance Services: Your Retirement Income Partner
We understand that annuities are not one-size-fits-all. At KEyO, we help you:
✅ Understand which annuity is right for your goals
✅ Compare top-rated carriers and income projections
✅ Customize income for you and your spouse
✅ Layer annuities with Social Security and investments
✅ Protect your retirement against taxes, market losses, and longevity risk
With Trusted Care. Tailored for You., KEyO ensures your income lasts as long as you do.
Final Thought:
You can’t control how long you’ll live—but you can control whether you’ll have income every step of the way. That’s the power of annuities.
