How to Create Your Annuity Retirement Plan in 2025

The Importance of Annuities in Retirement

Retirement plans and annuity retirement plans are essentially the same thing. By the way, I’m wearing a shirt that says, “Never Read the Comments.” But we do read the comments. If you’re on our YouTube channel and leave a comment, we’ll read it. Just be nice. You don’t have to be mean—just say, “Hey Stan, I don’t like the hat, the shirt,” or whatever, but be respectful and professional.

When it comes to retirement, it’s all about income. It’s about lifestyle. Annuities have a monopoly on lifetime income, and I’m assuming if you’re reading this, you’re thinking, “I need more income. I need more guarantees in my portfolio.”

Markets are volatile—up one day, down the next. As you approach retirement age, you start thinking about how much risk you want to shoulder and how much you want to transfer. Annuities are risk-transfer products. You’re transferring the risk to the insurance companies that issue them. Depending on the option, they’re paying you for life or the lifetime of you and your spouse. Annuities aren’t investments; they’re a transfer of risk—a pension plan for the future.

Building Your Income Floor

When it comes to retirement income, you need to establish your income floor. That includes Social Security, pensions, Required Minimum Distributions (RMDs)from your IRA, dividend income, or whatever income sources you’ve got. If you have a side hustle—selling popsicles at the fair, for example—add that in.

What’s your monthly income, and how much more do you need? If you don’t need more, an annuity may not be necessary at this time. Alternatively, you may want to plan for future income to offset inflation in the years to come.

Immediate vs. Future Income

Let’s break this down. We’re talking about creating your annuity retirement plan, which comes down to two things: income now or later.

• Need income now (within 30 days to a year)? You’re looking at an Immediate Annuity—specifically, a Single Premium Immediate Annuity (SPIA). We quote all carriers to find the best contractual guarantee for your situation.
• Need income later (13 months or 20 years down the road)? Consider these three products: Deferred Income Annuities (DIAs), Qualified Longevity Annuity Contracts (QLACs), and Income Riders.

You can use IRA, Roth IRA, or non-qualified accounts. Just note that QLACs can only be used with traditional IRAs and specific employer-sponsored plans.

Pricing and Customization of Annuities

With lifetime income annuities, pricing is primarily based on your life expectancy at the time payments begin. Interest rates play a secondary role. The income stream is a combination of return of principal plus interest.

When you contact us at The Annuity Man or use our proprietary calculators, we can customize quotes based on your goals. You can choose:

• Single life
• Joint life
• Period certain (fixed number of years)
• Installment refund
• Cash refund

Life-Only vs. Refund Options

"Life" means life. You’ll never outlive the payments. The insurance company is on the hook for as long as you live.

Life-only and joint-life-only structures pay the highest amount but stop when you (or both of you) die. The money goes “poof.”

But most people prefer some kind of refund structure. If that’s you, you’re not alone. You worked hard for your money—you want it to go to your family if you pass away early. That’s where refund options come in.

Refund Options: Installment vs. Cash

An installment refund means that the unused money is distributed to your listed beneficiaries in payments.

A cash refund means they get the unused money in a lump sum.

I like to joke that if you choose an installment refund, your beneficiaries will show up to your funeral in a Bentley. (Just kidding—but you get the idea.)

Choosing the Right Annuity Carrier

When you buy an annuity, you’re transferring risk to the insurance carrier. They need the Claims-Paying Ability to back that promise. That’s why we assess their ability before making a recommendation.

Conclusion

Here’s your step-by-step:

1. Figure out what income you need
2. Decide how you want to structure your annuity
3. Get quotes from all carriers
4. Review the carrier’s financial strength

At The Annuity Man, we walk you through every step. You can sign up for our free annuity owner’s manuals and use our calculators to get customized quotes.

Thanks for joining me, and I’ll see you next time!