What Is Guaranteed Income for Life?

Guaranteed income for life refers to a steady, predictable stream of income that lasts throughout your retirement—no matter how long you live. This kind of income provides financial security, peace of mind, and protection against the risk of outliving your savings, known as longevity risk.

Why It Matters in Retirement

With people living longer than ever, many retirees face the challenge of making their savings last for 20–30 years or more. Market volatility, inflation, and unexpected expenses can all impact retirement savings. A guaranteed lifetime income helps ensure that your basic living expenses are covered, regardless of market conditions or how long you live.

Sources of Guaranteed Lifetime Income

1. Social Security

Most retirees receive monthly benefits from Social Security, which are adjusted for inflation and continue for life. However, for many, Social Security alone may not be enough to cover all retirement expenses.

2. Pensions

Traditional pensions are becoming less common, but they provide guaranteed monthly income for life if offered by your employer.

3. Annuities

Annuities are insurance products that can convert a lump sum of money into a lifelong income stream. They are one of the most effective tools for creating guaranteed income for life.

How Annuities Provide Guaranteed Income

With certain types of annuities, like immediate annuities or deferred income annuities, you pay a lump sum to an insurance company in exchange for regular payments for life. Some annuities also offer:

• Joint life options to cover a spouse

• Inflation protection to maintain purchasing power

• Guaranteed minimum income benefits regardless of market performance

Benefits of Guaranteed Lifetime Income

• Peace of Mind: You’ll never run out of income.

• Simplicity: Know exactly how much you’ll receive and when.

• Protection: Shields you from market downturns and longevity risk.

• Legacy Options: Some annuities allow you to leave unused funds to heirs.

Is Guaranteed Income Right for You?

Guaranteed income products are ideal for retirees who want stability and are concerned about market risks or longevity. However, it’s important to consider:

• Your other sources of retirement income

• Desired flexibility and access to funds

• Health and life expectancy

• Fees and features of the product

Consulting a financial advisor can help you determine the best mix of guaranteed income and growth-oriented investments based on your personal retirement goals.