The Income Gap

Social Security and annuities work together to create a stable, guaranteed income stream for retirement. While Social Security provides lifelong benefits, adding an annuity can enhance your financial security, fill income gaps, and reduce the risk of outliving your savings.

How Social Security And Annuities Work Together For Retirement

Want to boost your retirement income? Let’s look at how Social Security and annuities can work together to provide a steady, reliable income stream. Here’s how combining these two sources of income can help create a solid financial foundation for your retirement.

Guaranteed Income from Two Sources

Social Security is a government-backed, lifetime source of income. It’s dependable, but you can strengthen your financial plan by adding a lifetime income annuity. With both Social Security and an annuity, you have two guaranteed income sources, adding more stability. This combined income helps cover your regular expenses and unexpected costs, giving you greater peace of mind in retirement.

Flexibility in Timing

One of the benefits of this strategy is timing flexibility. You get to decide when to start Social Security, and similarly, you can choose when to activate annuity payments. Many retirees prefer to delay Social Security for higher benefits, using an annuity for income in the meantime. This approach maximizes your Social Security benefits while still providing reliable income early on from the annuity.

Addressing Longevity Risk

One of the biggest retirement concerns is outliving your savings. With both Social Security and a lifetime annuity, you reduce this risk. Social Security provides income for life, and a lifetime income annuity does the same, giving you guaranteed income even if personal savings are depleted. By having both, you’re less vulnerable to running out of money no matter how long you live.

Diversifying Income Sources

Depending only on Social Security might not be enough, especially if you want a comfortable lifestyle. Adding an annuity diversifies your income sources, creating a cushion against market fluctuations or economic downturns. In times of economic uncertainty, having both Social Security and an annuity means you don’t have to worry as much about the ups and downs of the stock market.

Filling Gaps in Retirement Income

An annuity is flexible in helping fill gaps in retirement income, especially if you’re weighing the timing of Social Security. For instance, if you want to delay an annuity to allow it to grow, you might choose to start Social Security early instead. This way, you can evaluate which income source will grow more over time and strategically decide when to activate each. For example, if your Social Security benefits grow faster, you might delay that, while in other cases, letting your annuity defer may provide a higher payout later. This flexibility lets you make the most of each income source depending on your retirement needs.

Creating a Balanced Plan

For a balanced retirement plan, consider how much-guaranteed income you need to cover essentials—housing, healthcare, and daily expenses. Social Security may cover a portion, but an annuity can help make up any difference. Working with a financial advisor ensures this combination of Social Security and annuity income aligns with your personal goals, providing the security and flexibility you need.

No Obligation Consultation

Combining Social Security and annuities creates a strong foundation for a secure retirement, ensuring you have reliable income no matter what the future holds. By strategically balancing these two sources, you can maximize benefits, reduce financial risk, and gain peace of mind. Contact us today to explore how this strategy can work for you!