Retirement is supposed to be simple. A time to relax, travel, or finally slow down, but for many retirees, it feels anything but. Concerns about outliving their money keep many retirees up at night, and market swings, tax rule changes, and required minimum distributions (RMDs) add another layer of stress. After decades of saving, many will spend their retirement thinking: How do I make my money last — without making myself crazy in the process?
One possible answer is to turn a portion of your retirement savings into guaranteed lifetime income through an annuity. While the word “annuity” can bring to mind pushy sales tactics or fine print, the basic idea is straightforward: you use a portion of your retirement savings to create a steady paycheck you can’t outlive.
Certain types of qualified annuities can even help simplify RMDs or defer them altogether. For example, a Qualified Longevity Annuity Contract (QLAC) lets you postpone RMDs on up to $200,000 of IRA assets until as late as age 85 — giving you flexibility now and peace of mind later. Other income annuities can start payments immediately or at a chosen age, providing predictable cash flow no matter what the market does.
Annuities aren’t right for everyone. They trade flexibility for certainty, and that balance depends on your broader plan. But for retirees worried about longevity, market volatility, or the complexity of managing withdrawals, a properly structured annuity can restore the sense of stability and predictability that your paycheck once provided.
At Hanover, we approach annuities differently. We have access to a marketplace of commission-free, fiduciary annuities — designed for transparency, not sales. It’s the peace of mind many retirees seek, without the hidden strings.
If you’d like to explore whether an annuity could bring more clarity and calm to your retirement, we’re here to help you evaluate the options as part of your broader financial plan.