Close Close

Retirement Planning > Retirement Investing

Guaranteed Income: No Days Off in Retirement

Your article was successfully shared with the contacts you provided.

American Equity understands your clients look to you to help them find the retirement solutions that are in their best interest. While every retirement is unique, we also believe many of today’s pre-retirees and retirees face the same concerns: preserving money, maintaining a lifestyle they enjoy and securing a lifelong income.

American Equity has created a six-part series, comprising monthly articles and infographics, addressing common retirement concerns.

Previously, we covered:

This entry focuses on generating guaranteed income.

The Trouble With Retirement Is …

Abe Lemons, the outspoken college basketball coach, once quipped, “The trouble with retirement is you never get a day off.” This is perhaps more poignant now than ever. Today’s retirees are living longer and facing lengthier retirement. More than half (51%) of Americans retire between the ages of 61 and 651; meanwhile, the life expectancy of a 65-year-old today is 85.2 That means, on average, your clients today are looking at 20 to 24 years of retirement—many of them will live much longer. The number of Americans living 100 years or more is up 44% from 2000.3  

Within the next five years, 11,000 Americans a day will reach retirement. The expansion of defined contribution plans and decline of defined benefit plans/pensions (often featuring lifelong benefits) over the past 20 years means that many of these people are looking for reliable retirement vehicles. As a result, the 2025 retirement market will top $25 trillion. 4  

As this community grows, so does the demand for products that provide the benefits unique to fixed and fixed indexed annuities, such as guaranteed income.

However, the general retiring public remains unfamiliar with these products, or how they perform. In fact, according to The American College’s financial literacy surveys, nothing about annuities is clear to consumers. While your clients may understand the need for retirement income, they also want to understand how they can generate income.

5 Fixed Index Annuity Benefits Guaranteeing Income  

To help lead the discussion about the benefits of these products with clients, we outlined five basic benefits of a fixed index annuity and how they produce guaranteed income.

1. Guaranteed Protection – When a client purchases an annuity, their premiums are guaranteed 100% protection from index volatility. This is especially important for risk-averse clients who are looking for reliable protection.

2. Index Crediting Options – In addition to the guaranteed fixed interest rate, clients also may choose an index crediting strategy that determines how interest is credited to the contract. Each year, clients can select a strategy based on their individual preferences and financial goals. Due to the annuity design, their contract is guaranteed to never lose value due to index volatility.

3. Locked-In Interest – Any interest earned in the contract year is credited to the contract value and cannot be lost due to index volatility.

4. Tax-Deferred Growth – Clients also earn money without paying taxes on it. Unlike taxable investments, taxes are not paid until withdrawals are taken or income received. This allows the contract value to grow quickly while affording clients an opportunity to earn interest on both the interest and premium over time.

5. Guaranteed Payments – Depending on the individual contract, clients have a number of income payment options, ranging from lump sum to a lifetime of paychecks.

Day In and Day Out

Today and tomorrow’s retirees face a litany of questions. As insurance producers, we are tasked with assisting them in addressing their concerns and determining what solutions are in their best financial interest. One of the keys to doing this is helping them understand how retirement vehicles like fixed index annuities can work for them—day in and day out of retirement.

Our helpful retirement calculators and education resources can help clients understand how an annuity can benefit guaranteed income needs. 

Next Month

Look for our next installment featuring an infographic that illustrates the basic benefits of fixed index annuities covered in this article. 


  1. LIMRA Secure Retirement Institute analysis of U.S. Census Bureau’s Current Population Survey, March 2015
  2. Social Security Administration, 2014
  3. Centers for Disease Control and Prevention Report, 2016
  4. LIMRA Secure Retirement Institute analysis of Consumer Finance, Federal Reserve Board, 2014