A Better Way Financial
Empower Your Retirement
Retirement isn’t just about how much you’ve saved—it’s about how you use that money to generate income you can rely on for the rest of your life. One tool that often sparks confusion is the annuity. What are they really? Are they good or bad? And how can income annuities for retirement fit into your plan?
In this article, we’ll unpack the basics of income annuities specifically, examine the pros and cons, and show how A Better Way Financial helps retirees use them—only when it makes sense—to bridge income gaps and secure peace of mind.
An income annuity is a financial product typically offered by insurance companies that provides a guaranteed stream of income, often for life. They are often used to help retirees supplement their income in retirement when other sources such as Social Security falls short.
Think of an annuity like a personalized pension—one that you typically have more control over than a traditional pension from an employer.
| ✅ Pros | ❌ Cons |
| Guaranteed Income: You can create a predictable income stream that lasts as long as you live. | Not Liquid: Annuities often tie up your money, making it harder to access in a pinch. |
| Beneficiary Protection: Certain types of annuities return remaining funds to your beneficiaries if you pass away early. | Complexity: Not all annuities are created equal—some come with fees or confusing riders. |
| Tax-Deferred Growth: Your investment grows tax-deferred until withdrawal. | Not Ideal for Everyone: If your income needs are already covered through Social Security and pensions, you may not need one at all. |
| Flexible Payout Timing: You can defer your income start date, letting the value of the annuity grow and increasing your future income. |
Let’s say you need $100,000/year in retirement, and your combined Social Security only provides $60,000. That leaves a $40,000 income gap.
We can help you determine if putting a portion of your savings—say $500,000—into a high-quality annuity could guarantee that income for life. You’d keep the rest of your portfolio invested for inflation protection and long-term growth.
The best part? We evaluate dozens of annuity products from leading companies to find the ones with the highest guaranteed payouts, so you don’t have to do the research alone.
💡 Learn more about how we create a custom retirement income plan just for you →
A recent couple from Orfield came to us at age 60. They had saved $1.25 million but needed an extra $40,000/year in income. Social Security and pensions wouldn’t cover the shortfall.
We created a plan where they placed $500,000 into an income annuity that guaranteed that $40,000/year. The remaining $750,000 stayed invested to help them handle inflation, taxes, and emergencies.
Because they came to us three years before retirement, the annuity had time to grow, which saved them over $100,000 in extra capital they would have needed if they waited.
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