Can You Outlive an Annuity?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Understanding How Annuities Provide Lifetime Income

Benefits of Annuities

One of the main advantages of an annuity is that it can provide a stream of income you cannot outlive. Even if you live for 30 years after retirement, you will still have an income. This ensures that you will never outlive your savings. Additionally, annuities can help you plan your retirement expenses more easily, avoid the need to take on debt in retirement and leave a legacy for your family or a favorite charity.

Types of Annuity Payouts

There are two ways to receive annuity payments for life: annuitization or lifetime withdrawals.

  • Annuitization: You give the insurance company a lump sum of money, and they agree to make periodic payments to you for as long as you live. This payment method is irrevocable, meaning you cannot change your mind and get your money back.
  • Lifetime Withdrawals: You purchase a deferred annuity with a lifetime income rider, typically at an additional cost. This rider allows you to withdraw from your account while guaranteeing that you will receive payments for life, even if the account balance runs out.

Risks of Annuities

While an annuity can be a great way to ensure a steady income in retirement, there are some risks to consider:

  • High Fees: Some annuities have high fees, which can eat into your investment.
  • Lack of Liquidity: Annuitized payments are not liquid, meaning you cannot access your money if you need it before the specified period.
  • Market Risk: Variable annuities are subject to market risk, meaning their value can go down if the markets decline.
  • No Payments for Beneficiaries: With a straight life payout (annuitization), your beneficiaries will not receive any payments if you die.

Before you purchase an annuity, understand the risks and benefits. Annuities can be a great way to ensure a steady income in retirement, but they are not suitable for everyone. Talk to a financial advisor to see if an annuity is right for you.

How We Can Help

At The Annuity Expert, we understand the challenges you face in planning for a secure retirement. With 15 years of experience as an insurance agency, annuity broker, and retirement planner, we are committed to finding the best solutions at the lowest costs. We believe in providing personalized service tailored to your individual needs and preferences, ensuring you feel valued and special.

Addressing Your Core Problem

The main problem we solve is ensuring you have a steady income throughout retirement without the fear of outliving your savings. We recognize the symptoms of this problem, such as anxiety about financial security, difficulty in planning retirement expenses, and the risk of accumulating debt. We are here to provide you with peace of mind, knowing that you will have a reliable income stream for life.

What We Recommend

Step 1: Initial Consultation

The first step is to schedule a free consultation with our experts. During this meeting, we will assess your financial situation, retirement goals, and any concerns you may have. This step’s main benefit is understanding your needs clearly and how we can help you achieve financial security.

Step 2: Personalized Plan Development

Next, we will develop a personalized annuity plan tailored to your specific requirements. We will explain the different annuity options available and recommend the best solution for your situation. The main benefit is having a customized plan that aligns with your retirement goals and financial situation.

Step 3: Implementation and Ongoing Support

Finally, we will help you implement the annuity plan and provide ongoing support to ensure it meets your needs over time. The main benefit is knowing you have a trusted partner who will continue to guide you and make adjustments as necessary to maintain your financial security.

Features and Benefits

  • Personalized Service: Tailored plans to meet your unique needs.
  • Expert Advice: Access to experienced professionals who understand the intricacies of annuities and retirement planning.
  • Ongoing Support: Continuous assistance to ensure your plan remains effective.

Addressing Common Objections

  • High Fees: We work to find the most cost-effective solutions, minimizing fees.
  • Lack of Liquidity: We will explain the liquidity options available and help you choose the best one for your situation.
  • Market Risk: We offer options to mitigate market risk, such as fixed or indexed annuities.

Failing to plan for a secure retirement can lead to financial instability and stress. By working with us, you will enjoy peace of mind, knowing that your financial future is secure. You will experience a sense of relief and confidence, allowing you to enjoy your retirement without financial worries.

Contact us today for free advice or a quote and take the first step towards a secure and comfortable retirement.

Can You Outlive An Annuity?

Request A Quote

Get help or a quote from a licensed financial professional. This service is free of charge.

Contact Us

Frequently Asked Questions

Do annuities expire?

Annuities do not expire as they are designed to provide a steady stream of income for a specific period of life. However, some annuities may have contractually defined expiration dates, after which the payments stop. It is important to review the terms and conditions of an annuity contract to understand its specific provisions.

What happens if you outlive your annuity?

Some annuity payouts do not provide an income for life but rather a fixed period. If you outlive your annuity, you will not receive any more payments. This is one of the risks of annuities. Before you purchase an annuity, understand all the risks and benefits.

How do you get lifetime annuities?

You can purchase a lifetime income annuity from an independent licensed agent.

How much does a lifetime annuity cost?

Lifetime annuities can vary in cost depending on several factors, including age, health, and the type of annuity. Request a quote today to see how much a lifetime annuity would cost.

Can an annuity run out of money?

Yes, an annuity can run out of money if the payments exceed the funds within the annuity. This can happen if the annuitant lives longer than expected, or if the annuity is not managed properly. It is important to carefully plan and consider factors such as inflation, investment returns, and withdrawal rates to avoid running out of money.

How does an annuity work?

An annuity is a financial product that provides a regular income stream to an individual in exchange for an initial lump sum or series of payments. It works by investing the funds and then paying out a fixed sum over a predetermined period or for the rest of the person’s life. This ensures a steady income and can be a useful retirement strategy.

Which of the following types of annuity payouts could an annuitant outlive?

A life annuity is a financial product that guarantees a payout one cannot outlive. It provides a steady stream of income for the remainder of an individual’s life, offering financial security and peace of mind. With a life annuity, individuals can be assured of a regular payment, regardless of how long they live.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

Scroll to Top