Income Strategies
Compare Retirement Income Strategies
Annuities are one of several tools that can support a broader financial plan—especially when you want dependable retirement income and downside protection. Review the most common categories below, then connect with Makonnen to see how they fit alongside life insurance planning, mortgage strategy, and other priorities.
Fixed Annuities
Protect your principal and earn a guaranteed interest rate for a set period.
Ideal For
Conservative savers who value predictable growth and pension-like income.
Key Features
- Guaranteed minimum interest credited annually.
- Income options that can last for life or a defined term.
- Death benefit to pass remaining value to beneficiaries.
Considerations
- Returns may not keep pace with inflation.
- Surrender charges limit access to funds in early years.
Fixed Indexed Annuities
Link growth to an index such as the S&P 500 while keeping your principal protected during downturns.
Ideal For
Moderately conservative investors seeking market-linked potential with downside protection.
Key Features
- Index credits with caps, spreads, or participation rates.
- Optional income riders for lifetime payments.
- Penalty-free withdrawals up to a contract-defined amount.
Considerations
- Caps and spreads limit the upside you capture.
- Formulas vary by carrier—understanding them takes guidance.
Variable Annuities
Invest in professionally managed portfolios with tax-deferred growth and optional guarantees.
Ideal For
Growth-oriented investors who can handle market ups and downs and want income riders or death benefits.
Key Features
- Diversified subaccounts similar to mutual funds.
- Optional living benefit riders to lock in future income.
- Tax-deferred compounding on investment gains.
Considerations
- Market risk can reduce account value.
- Mortality, expense, and rider fees can be higher than other products.
Registered Index-Linked Annuities (RILAs)
Blend index-linked growth with defined downside protection buffers or floors.
Ideal For
Investors seeking more growth potential than fixed indexed annuities but still preferring partial protection.
Key Features
- Choose participation levels, buffers, or floors to manage risk.
- Opportunity to benefit from a portion of index growth.
- Tax-deferred growth during the accumulation phase.
Considerations
- Some exposure to losses remains if the index declines beyond the buffer.
- Returns are capped or limited by the terms you select.
Immediate Annuities
Convert a lump sum into an income stream that starts within 12 months.
Ideal For
Retirees seeking guaranteed income right away to cover essential expenses.
Key Features
- Payments can be structured for life or a specific period.
- Options for joint payouts that continue for a spouse.
- Simplicity—once payments begin there is little ongoing management.
Considerations
- Decision is typically irrevocable; access to principal ends once income starts.
- Fixed payments may lose purchasing power over time without cost-of-living adjustments.
Deferred Income Annuities
Lock in future guaranteed income that begins years down the road, often in your 70s or 80s.
Ideal For
Planners seeking longevity insurance to guard against outliving assets.
Key Features
- Future income amounts are guaranteed at contract issue.
- Can act as a Qualified Longevity Annuity Contract (QLAC) inside retirement accounts.
- Pairs well with other income sources for later-life stability.
Considerations
- No access to funds during the deferral period.
- Requires patience—income does not start immediately.
Not sure which strategy fits your needs?
Every financial situation is unique. Schedule a consultation with Makonnen to discuss your goals, timeline, and risk tolerance. He'll help you align annuity options with your broader financial plan.
For a deeper annuity education track, visit Benefits of Annuities.