Why Your Retirement Strategy Should Include a Guaranteed Income Stream
Most retirees don’t fear the market—they fear running out of money. And with pensions nearly extinct, the responsibility for building reliable retirement income has shifted almost entirely onto individuals. That’s why adding a guaranteed lifetime income stream to your plan isn’t just a nice feature—it’s one of the clearest ways to reduce uncertainty and create predictable cash flow you can actually live on.
Annuities with income riders can act like a personal pension. They’re designed to provide regular monthly payments for life, regardless of how long you live or what the markets do. For many households, that income can help “fill the gap” between Social Security and the lifestyle you want in retirement—especially when you want more stability than an all-market-based withdrawal strategy can provide.
The Power of Lifetime Income
Here’s a simple example. If you place $1,000,000 into a fixed indexed annuity with a guaranteed income rider, the contract may be able to produce something like $60,000–$75,000 per year in guaranteed income, depending on your age, payout design, rider structure, and when you start withdrawals. The goal isn’t to “beat the market.” It’s to create a paycheck you can count on—month after month—so your essential spending is covered with contractual guarantees.
That kind of certainty can change how retirement feels. Instead of wondering whether this is a “good year” to pull money from investments, you can anchor your plan with predictable income that shows up on schedule. Many retirees use this approach to reduce sequence-of-returns risk, avoid selling assets in down markets, and make budgeting far easier.
At Diversified Insurance Brokers, we help clients compare dozens of annuity contracts and income riders, including designs with joint lifetime payouts for spouses, income bonuses, and optional enhancements that can be especially helpful when planning for longer retirements. The right solution depends on your timeline, liquidity needs, and what you want your income to accomplish—so we focus on clear trade-offs, not hype.
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FAQs: Guaranteed Income Stream
What is a guaranteed income stream?
A guaranteed income stream is a steady flow of payments you cannot outlive, typically provided by an annuity or pension. It is designed to act like a personal paycheck in retirement, regardless of stock market performance.
How do annuities create guaranteed income?
Annuities convert a lump sum or rollover into scheduled payments backed by an insurance company. Depending on the contract, you can choose income for a set period, for life, or for joint lifetimes. Learn more on our page: What Is the Best Retirement Income Annuity?
What is the difference between lifetime income and period-certain income?
Lifetime income pays as long as you live (or for two lives with a joint option). Period-certain income pays for a fixed number of years, such as 10 or 20, even if you pass away earlier; remaining payments go to your beneficiary during that period.
Can I combine guaranteed income with Social Security?
Yes. Many retirees coordinate annuity income with Social Security to cover essential expenses like housing, food, and healthcare. This can reduce pressure on investments and help manage market risk. See more on how Social Security and annuities work together.
What factors determine how much guaranteed income I receive?
Your age, the amount you invest, the type of annuity or rider, payout option (single or joint life), and whether you choose cost-of-living increases all affect the size of your guaranteed income stream.
Are guaranteed income streams affected by market downturns?
Once your income is set under the contract terms, it is generally not reduced by market volatility. This is one reason many retirees use annuities and other guarantees to protect their core retirement income. To understand how this works, see How to Protect Your Funds in Retirement.
Can I leave money to beneficiaries with a guaranteed income stream?
Yes, depending on how the contract is structured. Options like period-certain, refund features, or joint-life with continuation can provide remaining value or continued payments to a spouse or other beneficiaries.
What is the difference between annuitization and an income rider?
Annuitization converts your annuity into a guaranteed income stream and is usually irrevocable. An income rider (such as a GLWB) keeps your account intact while allowing guaranteed withdrawals for life. For more detail, visit What Is a GLWB?
How do I compare different guaranteed income options?
Comparisons should include payout rates at your age, guarantees, fees, inflation options, and insurer strength. Many people start by reviewing retirement income annuity options and then request personalized illustrations.
When should I consider adding a guaranteed income stream to my plan?
Most people evaluate guaranteed income in the 5–10 years leading up to retirement, or when they want to reduce sequence-of-returns risk. It can be especially helpful if you rely heavily on your portfolio and want a more predictable base of income.
About the Author:
Jason Stolz, CLTC, CRPC, is a senior insurance and retirement professional with more than two decades of real-world experience helping individuals, families, and business owners protect their income, assets, and long-term financial stability. As a long-time partner of the nationally licensed independent agency Diversified Insurance Brokers, Jason provides trusted guidance across multiple specialties—including fixed and indexed annuities, long-term care planning, personal and business disability insurance, life insurance solutions, and short-term health coverage. Diversified Insurance Brokers maintains active contracts with over 100 highly rated insurance carriers, ensuring clients have access to a broad and competitive marketplace.
His practical, education-first approach has earned recognition in publications such as VoyageATL, highlighting his commitment to financial clarity and client-focused planning. Drawing on deep product knowledge and years of hands-on field experience, Jason helps clients evaluate carriers, compare strategies, and build retirement and protection plans that are both secure and cost-efficient.
