If you’re retiring without a traditional employer pension, an annuity can create your own guaranteed paycheck for life. This guide explains the key annuity options for retirees without pensions—how they work, who they fit, and how to combine them with Social Security and savings for steady, predictable income.

Best Annuity Options for Retirees Without Pensions

Each annuity solves a different income need. Many no-pension retirees combine two or more to cover essentials and keep flexibility.

1) Single Premium Immediate Annuity (SPIA)

• What it is: Turn a lump sum into income that starts within 12 months—like creating your own pension.
• Best for: Retirees who need income now, want maximum guaranteed payments, and value simplicity.
• Design choices: Life-only (highest payout), life with period certain, or joint life for a spouse.

2) Deferred Income Annuity (DIA)

• What it is: Lock in income that begins at a future date you choose (e.g., age 70 or 75) for higher payouts later.
• Best for: Covering late-retirement longevity risk and creating a future “paycheck” you cannot outlive.
• Tip: Pairs well with investments for the early years and guaranteed income kicking in later.

3) Fixed Indexed Annuity (FIA) with Income Rider (GLWB)

• What it is: Principal protection with index-linked growth and a guaranteed lifetime withdrawal benefit.
• Best for: Those who want downside protection, lifetime income guarantees, and the option to defer for potentially higher payouts.
• Note: You can structure single-life or joint-life income for a spouse.

4) QLAC (Qualified Longevity Annuity Contract)

• What it is: Use a portion of IRA/qualified assets to buy income that starts later (e.g., age 80+), helping manage RMDs and fund late-life expenses.
• Best for: Longevity hedge inside retirement accounts—especially for retirees who want to cover advanced-age essentials.

No-Pension Retirement Income: How to Build the Plan

• Cover essentials first: Use SPIA/DIA/GLWB to guarantee housing, food, utilities, and healthcare. Layer with Social Security.
• Keep flexibility for “fun money”: Maintain liquid savings/investments for travel, gifts, or projects.
• Coordinate with Social Security: Delaying the higher earner’s benefit can raise lifetime and survivor income; an annuity can bridge the gap.
• Taxes & Medicare (IRMAA): Sequence withdrawals and income to manage brackets and potential surcharges.

Annuity Comparison for Retirees Without Pensions

Who Benefits Most from Annuities Without a Pension?

• Retirees without a pension who want guaranteed income for essentials.
• Married couples seeking joint-life income that lasts for both spouses.
• Market-weary savers who prefer principal protection and predictable cash flow.
• Late-retirement planners who want to insure against living far beyond average life expectancy.

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FAQs: Annuity Options for No-Pension Retirees