5 Ways to Guarantee You’ll Have an Income in Retirement
Written by
Vance Cariaga
Edited by
Sequoya Davis
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
One of the biggest financial fears seniors face is running out of money in retirement — and with good reason. The risk of running out of money has increased as people live longer and burn through their retirement savings sooner than expected. It’s why it’s more important than ever to find sources of guaranteed income throughout your retirement.
You have a few different options when it comes to guaranteed retirement income. Here’s a look at five of our favorites.
1. Annuities
Among the best and safest ways to guarantee income in retirement is with an annuity. One option is the SteadyPace™ annuity offered through the Gainbridge® platform, which offers a guaranteed rate of up to APY* on your savings.
An annuity is an insurance product that pays out a fixed amount of money in a series of payments, often for as long as you live. Its main function is to remove longevity risk for retirees, meaning you don’t have to worry about outliving your savings.
Annuities are divided into two phases – the accumulation phase, when contributions are made to the account and funds grow; and the annuitization phase, when you start receiving payments.
There are a couple of reasons to invest in annuities. First, your money is in a safe place that provides steady returns over a long period of time. And second, the money grows through the interest you earn, so it pays to find the best rates.
Plus, the savings are tax-deferred, which means you don’t pay any income taxes on the annuity until you start to withdraw funds.
It’s easy to get started here and earn a guaranteed rate of up to APY on your savings.
2. Pensions
Pensions provide a predictable stream of income during retirement. The challenge is finding a job that provides one. Most private sector companies moved away from pensions a long time ago with the advent of 401(k)s and IRAs. Today, most pensions are only available with public sector jobs such as teachers, police officers, firefighters, utility workers and government employees. Union jobs are also more likely to provide pensions than non-union jobs.
If you are interested in working in one of those fields, there are some benefits to pensions. For example, teachers who meet pension requirements can keep getting a specific portion of their former salary throughout retirement.
3. Rental Income
Rental properties provide a good source of passive income that can last for decades. There are several ways to get into the rental market. One is to buy a second home, condo or apartment and rent it out. The main hurdle here is coming up with the money to purchase the property.
If you are able to acquire a property, you can either become an active landlord by managing the property yourself or hire a management company to handle the work. With the latter option, you typically pay the management company a percentage of the rent every month. In your golden years, this is probably the better option.
Another option is to rent out space where you live, whether it’s an apartment over a garage, a separate wing of the house with a private entrance, or a room. Just make sure you vet any prospective tenants carefully to ensure they are safe and trustworthy.
4. Dividend Stocks
Although not all dividend stocks “guarantee” an income, you can expect to get a steady income stream by investing in well-established companies with strong financial track records. With dividend stocks, you receive regular dividend payments that can be especially beneficial during retirement. The best dividend stocks offer both high yields and consistent financial growth.
5. Social Security
If you work enough years and earn enough credits, you will qualify for Social Security benefits and get a guaranteed payment every month throughout your retirement. The trick is to maximize your payment, and there are a couple of ways to do that. First, be sure to work for at least 35 years because benefits are based on average indexed monthly earnings on up to 35 full working years. The highest-earning 35 years are used in the Social Security Administration’s benefit calculation.
The other way to maximize your monthly Social Security check is to wait as long as possible to collect benefits. You can claim Social Security as early as age 62, but your payment will be lower than if you waited until a later age. You get the full benefit you are due at full retirement age and the highest possible benefit at age 70.
This is a paid advertisement.
SteadyPace™ is issued by Gainbridge Life Insurance Company in Zionsville, IN. on contract
form number ICC22-D-MYGA-BASE, or variations of such. Products and/or features may not
be available in all states. Guarantees are based on the claim-paying ability and financial
strength of the issuing insurance company.
Annuities are long-term investment vehicles and have charges, termination provisions, and
terms for keeping them in force.
*Rates subject to change at any time, and the rate mentioned is for a (3) year term and may no
longer be current. Please visit gainbridge.io for current rates, full product disclosures and
disclaimer, and other important information.
This communication is for informational purposes only. It is not intended to provide, and should not be interpreted as individualized investment, legal, or tax advice. To obtain such advice,
please consult with your investment, legal, or tax professional.
NOT FDIC/NCUA INSURED | MAY LOSE VALUE | NO BANK/CREDIT UNION GUARANTEE |
NOT A DEPOSIT | NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
More From GOBankingRates
