Guaranteed income can help cover your essential expenses in retirement, like housing, food, and healthcare, so you’re less dependent on market performance and less exposed to the risk of running out of money. If you’re approaching retirement, or already there, you’ve likely noticed that the conversation starts to shift. It’s no longer just about growing your portfolio. It’s about turning what you’ve built into income you can actually use.
I see this often when working with individuals and families at Fisher Financial Group, LLC. The question becomes simple:  
How do you create consistency in a phase of life where markets, taxes, and expenses can all change?
For many people, that’s where guaranteed income comes up in the retirement planning discussion.  
Who Should Consider Guaranteed Income Strategies?
You may want to think more seriously about this if you:


Are within 5–10 years of retirement or already retired


Don’t have a traditional pension


Have built meaningful savings but want more structure around income


Feel uneasy relying entirely on market-based withdrawals


Want to know your essential expenses are covered each month


If that’s where you are, you’re not alone. These are the same conversations I have every day with clients who are either nearing retirement or have already retired, and who are concerned about having their retirement savings and investments last for 30 years or more. 
What Is an Annuity and How Does It Work?
Let’s break this down in simple terms.  
An annuity is a contract with an insurance company in which you exchange a lump sum or a series of payments for a stream of income.  Sometimes that income starts right away. Other times, it starts later. I often describe it like this: you’re creating your own pension.
You can choose:


Income now (immediate annuity)


Income later (deferred annuity)


And there are different types:


Fixed (focused on stability)


Variable (tied to market performance)


Indexed (a mix of growth potential with limits)


From my perspective as an experienced retirement planner, annuities aren’t about chasing returns. They’re about addressing specific risks, especially the risk of outliving your money.
How Do Different Types of Annuities Compare?
Here’s a simple breakdown:





Type


When Payments Start


Risk


Key Benefit




Immediate Annuity


Right away


None to you


Income begins now




Deferred Income Annuity


Future date


None to you


Income later in life




Fixed Annuity


Immediate or deferred


None to you


Predictability




Variable Annuity


Immediate or deferred


You take market risk


Growth potential




Indexed Annuity


Immediate or deferred


Limited downside


Balanced approach




QLAC


Later (up to age 85)


None to you


Longevity planning





To simplify it even further:


Some annuities solve for income today


Others solve for income later in life


Some prioritize stability


Others introduce growth with trade-offs


The right fit depends on what you’re trying to solve for, not just what sounds appealing.
When Should You Consider Adding an Annuity?
This usually comes up when someone says things like:


“I don’t want to rely entirely on the market for income.”


“I want my core expenses covered no matter what.”


“I’m concerned about how long my money needs to last.”


In those cases, we’re not looking at annuities as a default solution. We’re looking at whether they help fill a specific gap. That’s how we approach it at Fisher Financial Group, LLC: starting with your retirement income needs and evaluating tools that may help support that structure.
How Do Annuities Fit With Social Security and Investments?
One of the most practical ways to think about retirement income is layering:


Social Security provides a base


Annuities can help cover additional essential expenses


Investments provide flexibility and growth potential


Let me give you a simple example. If your essential monthly expenses are $6,000: 


Social Security might cover $2,500


An annuity could help cover another portion


Your investment portfolio fills in the rest


This can reduce the pressure to withdraw from investments during down markets. I’ve found that when your baseline expenses are accounted for, it changes how you think about the rest of your money.  There’s often more flexibility in how you approach spending and investing.
How Do Annuities Compare to Other Income Strategies?
You’ve got options when it comes to generating income: 


Bond ladders:  Provide structured payments, but they eventually run out.


Dividend-paying stocks: Offer income, but that income can fluctuate.


Systematic withdrawals: Give flexibility, but depend heavily on market performance.


Annuities: Focus on consistency, especially over longer time horizons.


Most of the time, it’s not about choosing one over the others. It’s about how they work together. The better question is: Which risks are you trying to manage?
Take our free risk assessment here. 
What Should You Evaluate Before Purchasing an Annuity?
This is where I encourage people to slow down and ask the right questions:


How strong is the insurance company backing the contract?


What are the surrender periods and liquidity limits?


What fees are involved, especially with optional features?


How does inflation factor into the income stream?


What are the tax implications depending on how it’s funded?


These details matter. Two annuities that sound similar can behave very differently over time. That’s why these decisions are usually best made in the context of your broader financial picture.
What Are Common Misconceptions About Annuities?
There are a few misconceptions that come up often when people first look at annuities. One of the most common is the idea that “annuities are always bad,” but that’s an oversimplification. 
Some annuities are complex, while others are more straightforward; it really depends on how they’re structured and how they’re being used. 
Another concern is that all annuities are expensive. In reality, costs can vary widely depending on the type of annuity and any features it offers. There’s also a frequent belief that you lose your money if you pass away early, but many contracts include options designed to address that outcome. 
In my experience as a retirement planner in Northbrook, IL, most of these concerns stem from looking at the product in isolation rather than understanding how it fits into a broader financial plan.
What Should Your Next Step Be?
If you’re thinking about guaranteed income, I’d suggest starting with a few simple steps:


Identify your essential monthly expenses


Look at your current income sources


Determine whether there’s a gap


Explore how different tools, including annuities, might fit


At Fisher Financial Group, LLC, that process usually starts with a conversation. Not about products, but about how you want your retirement income to function. I don’t look at guaranteed income as a replacement for your portfolio. I look at it as a foundation. 
Once that foundation is in place, it can change how you view the rest of your plan: how you invest, spend, and think about the years ahead.

Ready to discuss your retirement planning needs in more detail?  Connect with us. 

          

About the author

Dan Fisher is a Registered Financial Consultant (RFC) and Federal Retirement Consultant (FRC) who has spent more than three decades guiding retirees and pre-retirees through tax-smart investing and income planning. As the founder of Fisher Financial Group, he brings a practical approach to helping clients make informed choices about their retirement.