Retirement Investing: Building Lifetime Income That Lasts

Key Takeaways

• Retirement today can stretch 25–35 years, which means your savings need to generate reliable income for decades—not just grow a nest egg. This article focuses on turning accumulated wealth into sustainable cash flow.

• Social Security typically replaces only about 30%–40% of pre retirement income, so you’ll need additional income streams from retirement investments, pensions, and annuities to maintain your lifestyle.

• Sequence-of-returns risk—experiencing poor market performance in the first 5–10 years of retirement—can permanently damage your retirement portfolio, even if long-term average returns look fine on paper.

• Guaranteed income sources like Social Security, pensions, and annuity contracts can protect against outliving your savings and reduce the impact of market volatility on your essential expenses.

• A long-term, diversified portfolio that blends growth assets (stocks), income assets (bonds, dividend payments), and a guaranteed income stream is generally more effective than chasing short-term market moves or going all-in on any single approach.

Six Core Retirement Investment Building Blocks

Most retirees don’t rely on a single product or account to fund their retirement. Instead, successful retirement income planning typically combines several building blocks, each serving a different purpose in your overall savings plan.

Here are the six concrete building blocks that form the foundation of most retirement income strategies:

Social Security– The foundation of retirement income for most Americans, providing inflation-adjusted monthly payments for life. When you claim (between ages 62 and 70) dramatically affects your lifetime benefits.

Employer Pensions– A defined benefit plan pays monthly income based on your years of service and salary. While less common in the private sector today, these plans provide valuable guaranteed income if you have one.

Individual Retirement Accounts (IRAs)– Flexible, personally controlled accounts that can hold almost any investment. Traditional IRAs offer tax deferred growth with taxable withdrawals; Roth IRAs grow tax free with qualified withdrawals.

Employer-Sponsored Retirement Plans– 401 k, 403(b), 457(b), and the federal Thrift Savings Plan let you accumulate savings through payroll deductions, often with an employer match that’s essentially free money.

Annuities– Insurance contracts that convert a lump sum into a guaranteed income stream, potentially for life. These directly address longevity risk and can protect against market volatility.

Income-Producing Investments– Bonds, bond funds, dividend stocks, and other securities that generate regular cash flow while preserving some growth potential.

The rest of this article explores how these pieces work together to generate retirement income for 20–30+ years while managing risks like inflation and market downturns.

How Much Income Will You Need in Retirement?

Financial planners often reference the “80% rule” as a starting point: aim to replace roughly 70%–90% of your pre retirement income, with 80% being a common target. This accounts for reduced work-related expenses (commuting, professional clothing, payroll taxes) while maintaining your lifestyle.

Here’s a concrete example: if your household earns $90,000 before retirement, you might target around $70,000–$75,000 per year in retirement income. But this is just a starting point—your actual number depends on factors like whether you’ve paid off your mortgage, your health status, and your travel plans.

To estimate your personal target, work through this simple process:

1. Estimate annual living expenses by category– Housing (mortgage/rent, property taxes, insurance, maintenance), food, healthcare (premiums, out-of-pocket costs), transportation, utilities, and discretionary spending (entertainment, dining, hobbies)

2. Add one-time goals– Home renovation projects, major trips, helping adult children or grandchildren, vehicle replacements

3. Adjust for inflation– If retirement is 5–15 years away, consider that prices will be higher when you stop working. Even 3% annual inflation means costs rise roughly 35% over a decade.

Healthcare costs often rise faster than general inflation. Many planners recommend building an extra buffer—perhaps 5%–7% annual healthcare inflation—into your projections, especially for years beyond age 75.

Example scenario:A 62-year-old couple currently spending $6,500/month might project needing $6,000/month in retirement (after eliminating commuting and work expenses), plus $15,000–$20,000 per year for travel in early retirement, and an additional healthcare buffer of $300/month that grows over time.

How Much of That Income Will Come from Guaranteed Sources?

Before diving into investment options and withdrawal strategies, start by calculating your “baseline” guaranteed income—money that arrives regardless of what the stock market does.

The Social Security Administration provides online tools at SSA.gov where you can check your projected benefits at different claiming ages. This is one of the most important steps in retirement planning, yet nearly half of Americans don’t know their projected benefit.

Here’s why claiming age matters so much: if you’re expecting $2,200/month at your fullretirementage of 67, delaying to age 70 could boost that to roughly $2,700–$2,900/month—a 24%–32% permanent increase. Since Social Security provides inflation protection and lasts for life, this delay acts like purchasing an annuity with an excellent payout rate.

Traditional pensions work similarly. If you have a defined benefit plan, your employer pays lifetime monthly income based on your years of service and final salary. While these plans are becoming rare in the private sector, public employees and some union workers still have access to them. Check with your HR department for your projected pension amount at various retirement ages.

The gap example:Suppose you need $70,000/year after taxes in retirement. Your Social Security plus pension will provide $40,000/year. That leaves a $30,000/year income gap that must come from your retirement savings, investments, or additional annuity income. Knowing this gap is essential for designing your investment strategy.

Understanding Sequence-of-Returns Risk

Sequence-of-returns risk is one of the most misunderstood dangers in retirement investing. Simply put, it’s the risk that poor market returns in the first 5–10 years of retirement force you to sell investments at low prices, permanently damaging your retirement portfolio—even if long-term average returns are acceptable.

Here’s a concrete illustration comparing two retirees:

Retiree AandRetiree Bboth start with $1,000,000 and withdraw 4% ($40,000) per year, adjusted for inflation. Both portfolios earn the same 6% average annual return over 30 years. The only difference is the order of returns:

• Retiree Aexperiences a bear market in years 1–5 (returns of -20%, -15%, -10%, +5%, +8%)

• Retiree Bexperiences the same bear market in years 16–20

Despite identical average returns, Retiree A may run out of money 5–10 years earlier than Retiree B. Why? Because Retiree A sells shares at depressed prices to fund those $40,000 withdrawals, leaving fewer shares to participate in the recovery. This is sometimes called “reverse dollar-cost averaging.”

Strategies to reduce sequence-of-returns risk:

1. Keep 2–3 years of expenses in cash or short-term bonds– This creates a withdrawal buffer so you don’t have to sell stocks during downturns

2. Adjust withdrawals slightly after bad market years– Even a 5%–10% temporary reduction can dramatically improve long-term sustainability

3. Include guaranteed income sources– Annuity income and Social Security don’t fall when markets drop, reducing how much you need to withdraw from investments

4. Avoid taking too much stock risk as retirement begins– The 5 years before and after retirement are the most vulnerable period

Sequence-of-returns risk is one reason why planning for the first decade of retirement is so critical. But going entirely to cash isn’t the answer either—you’d lose the growth needed to fund a 25–35 year retirement and combat inflation.

Long-Term Retirement Income Strategy: Buckets, Time Horizons, and Flexibility

A 65-year-old today has a reasonable chance of living into their late 80s or early 90s. For couples, there’s a significant probability that at least one partner reaches 95. This 25–35 year time horizon requires a long-term investment strategy—not year-to-year guessing.

One popular framework is thethree-bucket strategy:

Bucket 1: Short-term (1–3 years of expenses)

• Cash, money market funds, CDs, or short-term Treasury bonds

• Purpose: Fund immediate withdrawals without selling other investments

• Provides psychological comfort and prevents panic selling during downturns

Bucket 2: Medium-term (4–10 years of expenses)

• Bond funds, stable value funds, intermediate-term Treasuries, municipal bonds

• Purpose: Refill Bucket 1 as needed while earning modest returns

• Offers principal value stability with better income than pure cash

Bucket 3: Long-term (years 10+)

• Diversified stock funds, index funds, dividend stocks, possibly real estate

• Purpose: Growth to combat inflation and fund later retirement years

• Has time to recover from market downturns before you need these assets

The goal is straightforward: fund spending from cash and bonds during market downturns, leaving stocks more time to recover. This directly addresses sequence-of-returns risk.

Rebalancing approach:Once a year (or when allocations drift significantly), review your buckets. After strong stock market years, trim some gains and refill Buckets 1 and 2. After poor years, consider reducing discretionary spending slightly rather than selling depressed stocks to refill the cash bucket.

Flexibility is essential. Your investment strategy should evolve as markets, health, and financial goals change. What works at 65 may need adjustment at 75 or 85.

Tax-Advantaged Retirement Accounts and How to Use Them Near Retirement

In retirement, the type of account you withdraw from can be as important as the investments inside it. Tax advantages vary dramatically between account types, and Required Minimum Distributions (RMDs) eventually force withdrawals from most tax deferred accounts.

Common retirement accounts at a glance:

Key ages to remember:

• 59½– Penalty-free withdrawals from most retirement accounts

• 62–70– Typical retirement window and Social Security claiming range

• 73– RMDs currently begin (verify with IRS as rules change)

• 75– Future RMD start date for certain birth years

Tax-smart withdrawal order concept:

1. Early retirement (before RMDs begin)– Consider strategic withdrawals from tax deferred accounts to “fill up” lower tax brackets and reduce future RMD amounts. This is also prime time for Roth conversions.

2. Taxable accounts– Use these for flexibility, since long-term capital gains often receive favorable rates compared to ordinary income tax

3. Roth assets– Preserve these when possible for later years (when you may be in a higher bracket due to RMDs) or for heirs, since qualified withdrawals are tax free

Managing taxable income in retirement affects not just your income tax bill, but also Medicare premiums and how much of your Social Security benefits get taxed.

Individual Retirement Accounts (IRAs) as Part of Your Income Plan

Individual retirement accounts offer flexibility that employer plans often lack. You control the investments, the timing of withdrawals, and the custodian. This makes IRAs powerful tools for both accumulation and income distribution.

Traditional vs. Roth IRAs from a retiree’s perspective:

Many retirees consolidate old 401(k) accounts into a Rollover IRA. This simplifies your retirement portfolio, provides access to a wider range of investment options, and makes it easier to implement a unified withdrawal strategy.

Practical example:A 65-year-old retiree with $400,000 in a Traditional IRA and $150,000 in a Roth IRA might take baseline income from Traditional IRA withdrawals (staying within the 12% or 22% tax bracket), then top up with targeted Roth withdrawals for large discretionary expenses—like a major trip—without jumping into a higher bracket or triggering higher Medicare premiums.

SEP and SIMPLE IRAs function similarly to Traditional IRAs in retirement and are relevant primarily for those who were self-employed during their working years.

Employer-Sponsored Plans: 401(k), 403(b), 457(b) and Thrift Savings Plan

For many workers, employer sponsored retirement plans like the 401 k are the primary vehicle for saving money toward retirement. These plans offer higher contribution limits than IRAs and often include employer matching contributions.

Basic features:

• 401(k)– Most common in private companies; pre-tax or Roth options available

• 403(b)– Available to educators, non-profit employees, and certain healthcare workers

• 457(b)– Government and some non-profit employees; unique early withdrawal rules

• Thrift Savings Plan (TSP)– Federal employees and military; extremely low-cost index funds

Current contribution limits allow workers under 50 to contribute over $23,000 annually, with additional catch-up contributions for those 50 and older. Workers ages 60–63 now have access to even higher catch-up provisions under recent legislation—a valuable opportunity to boost retirement savings in the final working years.

Options at retirement:

1. Leave money in the plan– Sometimes makes sense if the plan has excellent low-cost funds

2. Roll over to an IRA– Provides more investment options and consolidates accounts

3. Take partial or systematic withdrawals– Many plans allow flexible distributions

4. Purchase an annuity– Some plans offer in-plan annuity options; you can also roll funds out and purchase annuity contracts externally

Important:Review your plan’s investment menu and fees 2–5 years before retiring. Make sure your asset allocation matches your income timeline and risk tolerance. A target date fund can automatically adjust your mix, but you may want more control as retirement approaches.

Annuities: Creating Lifetime Income and Managing Longevity Risk

An annuity is an insurance contract where you exchange a lump sum (or series of payments) for guaranteed income that can last for a fixed period or for life. The issuing insurance company pools longevity risk across many policyholders, allowing them to pay out more than you might safely withdraw from investments on your own.

Why annuities matter in retirement:

• Longevity risk– Annuities directly address the risk of outliving your savings. Payments continue even if you live to 100.

• Sequence-of-returns protection– Annuity income doesn’t fall when markets drop, reducing pressure on your investment portfolio during downturns.

• Behavioral benefits– Many retirees underspend because they fear running out of money. A predictable paycheck can increase spending confidence and quality of life.

Key types for income planning:

Pros and cons:

Example:A 67-year-old retiree might use $200,000 of a $900,000 retirement portfolio to buy a lifetime income annuity, locking in perhaps $10,000–$13,000 per year (rates vary by age, gender, and interest rates). This reduces the withdrawal burden on remaining investments and covers a portion of essential expenses regardless of market conditions.

How Annuities Fit into a Long-Term Retirement Strategy

Annuities work best as one layer in an income “floor”—alongside Social Security and any pension—rather than as your only asset.

A common approach is thefloor-and-upside strategy:

1. Define essential vs. discretionary expenses– Essentials include housing, food, utilities, basic healthcare, and insurance. Discretionary includes travel, hobbies, and gifts.

2. Cover essentials with guaranteed income– Use Social Security, pensions, and annuities to create income that covers your must-have expenses.

3. Invest remaining assets for growth and flexibility– Because essentials are covered, your investment portfolio can target riskier investments for inflation protection and discretionary spending.

Some retirees combine strategies: delay Social Security until age 70 for maximum lifetime benefits, then purchase a deferred income annuity that begins at age 80 or 85 as a backstop against very long life expectancy.

Important:Annuity guarantees depend entirely on the issuing insurance company’s claims paying ability. Before purchasing, check insurer financial strength ratings (A.M. Best, S&P, Moody’s) and understand all contract terms, fees, and surrender charges.

Income-Producing Investments: Bonds, Dividend Stocks, and Total-Return Portfolios

Even in retirement, most people keep a meaningful share of their retirement portfolio invested to generate income and combat inflation. The question is how to balance income, growth, and managing risk.

Bonds and bond funds:

Bonds provide regular interest payments and typically offer lower volatility than stocks. Common options include:

• U.S. Treasury bonds– Backed by the federal government; interest exempt from state/local tax

• Investment-grade corporate bonds– Higher yields than Treasuries with modest credit risk

• Municipal bonds– Interest often tax free at federal (and sometimes state) level; attractive for those in higher brackets

• Short-term bond funds– Less sensitive to interest rate changes; useful for the medium-term bucket

Bonds tend to provide stability, but they’re vulnerable to inflation (fixed payments lose purchasing power) and interest-rate risk (bond prices fall when rates rise).

Dividend-paying stocks and equity income funds:

Dividend payments from stocks can provide growing income if companies increase their payouts over time. Dividend stocks also offer capital appreciation potential. However, unlike bonds, dividend payments are not guaranteed—companies can cut or eliminate dividends during difficult times.

The total-return approach:

Rather than chasing only high-yield investments (which often carry hidden risks), many retirees target a sustainable withdrawal rate—perhaps 3%–4% per year—from a diversified portfolio of stocks and bonds. Income comes from a combination of interest, dividends, and occasional share sales.

Example allocation for a typical 65-year-old retiree:

• 40%–50% stocks (diversified across U.S., international, and dividend-focused funds)

• 35%–45% bonds (mix of government, corporate, and municipal bonds)

• 10%–15% cash and short-term reserves

These percentages should be tailored based on your guaranteed income, risk tolerance, health, and goals. Working with an investment professional or financial professional can help stress-test your allocation against different market scenarios.

Managing Inflation, Healthcare Costs, and Long Retirement Timelines

Over a 25–30 year retirement, even modest inflation of 2%–3% annually can cut your purchasing power in half. A dollar today might buy only 50 cents worth of goods in 25 years. This is why most retirees need continued exposure to growth assets—not just fixed income.

Inflation-fighting tools:

• Diversified stock holdings (historically outpace inflation over long periods)

• Treasury Inflation-Protected Securities (TIPS)

• Real estate investment trusts (REITs)

• Annuities with cost-of-living adjustment (COLA) riders

• Delaying Social Security (benefits are inflation-indexed)

Healthcare costs deserve special attention:

Medicare typically begins at age 65, but premiums, deductibles, and out-of-pocket costs can still be substantial—and they usually rise faster than general inflation. Many retirees are surprised by costs for:

• Medicare Part B and Part D premiums

• Medigap (supplemental) or Medicare Advantage plans

• Prescription drugs not fully covered

• Dental, vision, and hearing (often not covered by Medicare)

• Long-term care (assisted living, nursing care, in-home support)

Planning for long-term care:

Long-term care can cost $50,000–$100,000+ per year depending on location and level of care. Options include:

• Dedicated savings set aside specifically forcare needs

• Traditional long-term care insurance (premiums can be high and increase over time)

• Hybrid life insurance/long-term care policies

• Long-term care annuities that provide tax benefits if used for qualifying care expenses

Regardless of your approach, build in periodic reviews—every 1–2 years—to adjust your investment mix and income strategy as actual inflation, health status, and family circumstances evolve.

Putting It All Together: Designing Your Personal Retirement Income Plan

Building a secure retirement income plan follows a logical sequence:

Step 1: Define your retirement lifestyle and spending targetCalculate your desired annual spending, separating essential expenses from discretionary goals.

Step 2: Calculate guaranteed incomeTotal your Social Security (check at SSA.gov), pension, and any existing annuity income.

Step 3: Measure the income gapSubtract guaranteed income from total spending needs. This gap must come from retirement investments.

Step 4: Design an investment and withdrawal planDecide how to allocate savings across different asset classes, how much (if any) to annuitize, and which accounts to tap first.

Cohesive example:

Meet John and Sarah, both 65, with $1,000,000 in combined retirement savings and an expected $40,000/year from Social Security (combined). They want $80,000/year in retirement income.

They allocate $200,000 to purchase a joint-life immediate annuity, locking in $11,000/year regardless of markets. The remaining $800,000 is divided across a three-bucket strategy: 15% cash/short-term bonds (Bucket 1), 35% intermediate bonds (Bucket 2), and 50% diversified stocks (Bucket 3). They withdraw approximately 4% annually from the investment portfolio, adjusting down slightly after poor market years.

Build in flexibility:

• Set guardrails: minimum 3% withdrawal rate, maximum 5%

• Create rules for cutting discretionary spending if the portfolio falls 20%+ over several years

• Plan to rebalance annually and refill Bucket 1 after strong stock years

Document your plan in writing.Include:

• Which accounts to tap first (and in what order)

• Target asset allocation ranges

• When to revisit assumptions about longevity, inflation, and healthcare

• Contact information for your financial professional or investment professional

Consider working with a fiduciary financial planner to stress-test your strategy under different market and longevity scenarios. A good planner can help you make informed decisions about Social Security timing, Roth conversions, annuity purchases, and asset allocation—potentially adding years to your portfolio’s sustainability.

FAQs About Retirement Investing and Income Strategies

Q: I’m 60 and behind on my retirement savings goal. Is it too late to build a long-term income strategy?

It’s not too late, though you’ll need to be strategic. Focus on maximizing contributions in your final working years—catch-up contributions allow those 50 and older to save significantly more in employer sponsored plans and IRAs. Consider delaying Social Security to age 70 if possible, as this permanently increases your inflation-adjusted lifetime income by 24%–32% compared to claiming at 67. Part-time work for even 2–3 years into retirement can dramatically reduce portfolio strain during the vulnerable early years. Finally, carefully evaluate whether partial annuitization makes sense to create baseline guaranteed income and reduce sequence-of-returns risk. Start saving early is ideal advice, but starting now beats not starting at all.

Q: How much of my portfolio should I put into annuities?

There’s no universal answer. A common approach is to annuitize enough—combined with Social Security and any pension—to cover essential expenses. For many retirees, this means 20%–40% of investable assets, but your ideal amount depends on health status, risk tolerance, existing guaranteed income, and legacy goals. Someone with a generous pension may need little or no additional annuity income, while someone with no pension and modest Social Security might benefit from greater annuitization. The key is matching guaranteed income to non-negotiable expenses.

Q: Should I pay off my mortgage before I retire or invest the extra cash?

This depends on your mortgage interest rate, expected investment returns, and personal comfort with debt. Mathematically, if your mortgage rate is 4% and you expect 6%–7% long-term investment returns, investing may win—but this ignores the emotional and cash-flow benefits of entering retirement debt-free. Having no mortgage payment reduces your essential expenses, meaning less of your retirement income goes to housing. Many retirees find peace of mind more valuable than optimizing returns. Consider your emergency fund needs, tax situation (mortgage interest deductibility), and how carrying debt affects your sleep before deciding.

Q: What withdrawal rate is considered “safe” for a 30-year retirement?

The traditional “4% rule” suggests withdrawing 4% of your initial portfolio balance, adjusted for inflation each year, should last 30 years under most historical market conditions. However, this rule assumed a certain percentage in equities (50%–75%), U.S. historical returns, and a fixed withdrawal pattern. In today’s lower-yield environment, many planners suggest a more conservative 3%–3.5% starting rate, or preferably a flexible approach where you reduce withdrawals modestly after poor market years. The exact number matters less than building flexibility into your plan and reviewing annually.

Q: How often should I change my retirement investments once I’m retired?

Resist the urge to react to every market move. Set a long-term target allocation aligned with your financial objectives and income timeline, then rebalance on a schedule—typically once per year or when allocations drift beyond predetermined thresholds (e.g., 5% from target). Major changes should only occur when your life circumstances change meaningfully: a health diagnosis, death of a spouse, significant shift in spending needs, or change in legacy priorities. Constant trading typically hurts returns through transaction costs, taxes on capital gains, and behavioral mistakes. The goal is a disciplined, long-term approach—not perfection in any single year.

Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Revolutionary Wealth LLC does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance.Past performance is no guarantee of future results.

Rebalancing/Reallocating can entail transaction costs and tax consequences that should be considered when determining a rebalancing/reallocation strategy.

A REIT is a security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. REITs receive special tax considerations and typically offer investors high yields, as well as a highly liquid method of investing in real estate. There are risks associated with these types of investments and include but are not limited to the following: Typically no secondary market exists for the security listed above. Potential difficulty discerning between routine interest payments and principal repayment. Redemption price of a REIT may be worth more or less than the original price paid. Value of the shares in the trust will fluctuate with the portfolio of underlying real estate. Involves risks such as refinancing in the real estate industry, interest rates, availability of mortgage funds, operating expenses, cost of insurance, lease terminations, potential economic and regulatory changes. This is neither an offer to sell nor a solicitation or an offer to buy the securities described herein. The offering is made only by the Prospectus. 

Not associated with or endorsed by the Social Security Administration, Medicare or any other government agency.

Maximizing your Social Security Benefits assumes foreknowledge of your date of death. If as an example you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.

Converting an employer plan account or Traditional IRA to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including but not limited to, a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.

Fixed Annuities are long term insurance contracts and there is a surrender charge imposed generally during the first 5 to 7 years that you own the annuity contract. Indexed annuities are insurance contracts that, depending on the contract, may offer a guaranteed annual interest rate and some participation growth, if any, of a stock market index. Such contracts have substantial variation in terms, costs of guarantees and features and may cap participation or returns in significant ways. Investors are cautioned to carefully review an indexed annuity for its features, costs, risks, and how the variables are calculated. Any guarantees offered are backed by the financial strength of the insurance company. Surrender charges apply if not held to the end of the term. Withdrawals are taxed as ordinary income and, if taken prior to 59 ½, a 10% federal tax penalty.

Please consider the investment objectives, risks, charges, and expenses carefully before investing in Variable Annuities. The prospectus, which contains this and other information about the variable annuity contract and the underlying investment options, can be obtained from the insurance company or your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.

The investment return and principal value of the variable annuity investment options are not guaranteed. Variable annuity sub-accounts fluctuate with changes in market conditions. The principal may be worth more or less than the original amount invested when the annuity is surrendered.

QLACs cannot be purchased with Roth or Inherited IRA dollars; value of such IRAs cannot be included in determining 25% premium limit. If Funding Source is Traditional IRA, 25% limit is calculated by combining the total value of all Traditional IRAs as of December 31st of the previous year. If Funding source is Employer sponsored qualified plan (401k, 403b and governmental 457b), 25% limit is calculated on an individual plan basis based on the plan’s account value on the previous day’s market close. If you previously purchased a QLAC, the calculation of your 25% limit is more complicated. Please contact an attorney or tax professional for additional details. Any guarantees of the annuity are backed by the financial strength of the underlying insurance company.

The projections or other information generated by Monte Carlo analysis tools regarding the likelihood of various investment outcomes are hypothetical in nature, are based on assumptions that you provide which could prove to be inaccurate over time, do not reflect actual investment results, and are not guarantees of future results. Results may vary with each use and over time.