Retirement Income Options
Consider Turning Your Retirement Annuity Savings into Guaranteed Lifetime Income
Think of your retirement income like a recipe—a balanced plan lets you enjoy a protected income for the expected bills and access to money for life’s surprises—so you can retire with confidence. Generally, there are four distribution options that can be considered—either alone or mixed and matched—to turn into retirement income:
Option 1: Take a lump sum
This option allows full access to all of your money, but there's a risk that you might spend your money quicker than expected and end up running out of savings. Plus, you probably want to avoid paying the taxes that can come with a lump sum distribution.
Did you know 1 in 3 retirees who take a lump sum spend it within five years?1
Option 2: Rollover the funds into an IRA
Rolling over retirement savings into a traditional IRA provides full access to your money, plus the potential for growth if reinvested. However, it’s important to consider fees and commissions that may come with opening and managing an IRA. Market fluctuations can also impact your balance, and there’s a risk of loss if the market declines.
Option 3: Split your retirement savings into payments
With a systematic withdrawal plan (SWiP), you can opt to withdraw money on a regular schedule, such as once a month for 30 years. However, if you outlive your withdrawal schedule, you may outlive your savings.
Option 4: Receive a guaranteed paycheck for life
You can consider turning a portion of your annuity savings into a guaranteed monthly “paycheck” that lasts as long as you do2—so you and your loved ones feel confident about the future. These payments can supplement what you receive from Social Security, pensions, or other savings and help cover your essential living expenses.
While the money used for this purchase is no longer accessible, you can feel confident knowing a portion of your income is secure, no matter how long retirement lasts. Consider turning just a part of your savings for this steady income and keep the rest flexible, so you’re in control of your retirement plan.