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Immediate income and deferred income
An immediate annuity commonly begins payments within a year after purchase. A deferred income arrangement starts later. The quote is shaped by the premium, ages, state, payment start date, payment frequency and selected guarantees. Delaying income can change the payment amount, but it also delays access to income.
For income that starts soon, compare payout choices, access to principal and funding considerations in our single premium immediate annuity (SPIA) guide.
Income annuity or indexed annuity with an income rider?
An immediate or deferred income annuity exchanges premium for a defined payment stream; access to the premium is generally limited and the election may be irreversible. A fixed indexed annuity with a guaranteed lifetime withdrawal benefit (GLWB) can instead provide contract-defined lifetime withdrawals without annuitizing the remaining contract value. Not every indexed annuity includes this feature. Rider charges, withdrawal limits and excess-withdrawal rules vary; taking too much can reduce or end the income guarantee. An income benefit base is a calculation used to set payments, not cash you can withdraw. Its roll-up rate is not a return on your available money. Compare the actual guaranteed payment, remaining cash surrender value, spouse protection and fees for the same premium and start date. Keep emergency money outside the contract.
For a product-family example, see our Global Atlantic ForeIncome II and SecureFore II comparison.
Single-life, joint-life and period-certain choices
A single-life option is based on one person's lifetime. A joint-life option can continue while either covered person remains alive, usually with a different payment than a comparable single-life election. A period-certain feature can continue scheduled payments to a beneficiary for the remaining stated period if death occurs early. Each added protection can affect the starting payment.
Plan income around your retirement
Review your income start date, spouse protection and access to money with Jared and Erin. Bring an annuity quote if you have one—or start with your questions. You do not need an exact allocation or a finished plan.
Short inquiry form, then choose a call time. No obligation to purchase.
The tradeoff for a dependable payment
Income annuities can reduce the risk of outliving a selected income source, but they can also reduce liquidity. Some elections are difficult or impossible to change after payments begin. Fixed payments may lose purchasing power over time, and beneficiary value depends on the option selected. These tradeoffs should be compared with pensions, Social Security, cash reserves and invested assets.
What the insurer promise means
Payment obligations are promises of the issuing insurance company and are subject to that insurer's claims-paying ability. An annuity is not a bank account and is not insured by the FDIC. State guaranty-association protections can vary and should not be used as the primary reason to purchase a contract.
Income taxation is contract-specific
The taxable portion of a payment depends on whether the premium came from qualified retirement money or after-tax money and on the contract's cost basis. IRS rules distinguish recovery of basis from taxable income. A tax professional should review the specific funding source and election before a decision is made.
How much monthly income do you need to cover?
Start with your household budget, not an advertised payout rate. Add the monthly expenses you want dependable income to cover, then subtract Social Security, pensions and other dependable income available at the same retirement date. For a hypothetical household with $4,800 in monthly expenses and $3,300 in existing monthly income, the gap is $1,500. Use consistent before-tax or after-tax amounts. This is a budgeting example, not an annuity quote or a recommendation to cover the whole gap with an annuity. Keep emergency reserves, future large purchases and inflation in the plan. The premium needed for any chosen payment requires a current insurer quote.
What to bring to your guaranteed-income review
Bring your target monthly income, desired start date, age, state and the amount you are considering allocating. Identify whether the money is in an IRA, an employer plan or after-tax savings, and whether payments should cover one life or two. Tell us what cash must stay accessible and what you want a beneficiary to receive. Ask for comparisons using the same premium, start date and survivor protections; a larger payment with different terms is not an apples-to-apples comparison. You can schedule a review using the inquiry calendar on this page without having every number ready. The review can help organize those questions before any purchase decision.
Frequently asked questions
What does guaranteed retirement income mean?
It means an issuing insurer is contractually obligated to make the payments defined by the selected annuity option. The obligation depends on the insurer's claims-paying ability and the exact contract terms.
What is the difference between lifetime and period-certain income?
Lifetime income is tied to one or more covered lives. Period-certain income is scheduled for a stated number of years and can continue to a beneficiary for the remaining period if death occurs early.
Is an annuity income quote the same for everyone?
No. Premium, age, state, start date, payment frequency, single-life or joint-life selection, and beneficiary protections can all change the quoted payment.
Official sources
These independent public resources explain the regulatory, contract and tax concepts discussed above.