When planning for retirement, one of the biggest challenges is ensuring you never outlive your savings. Annuities with lifetime income riders are designed to address that problem by providing a steady, predictable paycheck for life—no matter how long you live. But are they worth the cost?
How Income Riders Work
An income rider is an optional feature you can add to a deferred annuity. For an additional fee, it guarantees a specific level of income starting at a future date, even if your annuity’s account value drops to zero. This makes them one of the most popular guaranteed income annuity options available today.
Why Retirees Choose Them
- Peace of mind knowing income is guaranteed for life
- Protection against market downturns—your payout doesn’t change if markets drop
- Flexibility to start income when you need it most
When They May Not Be Worth It
Income riders have costs, usually a small percentage of your annuity’s value each year. If you don’t plan on using the income feature, or if you need more liquidity, the extra cost may not make sense.
Bottom Line
If your goal is to fill a retirement income gap and protect against longevity risk, income riders can be a valuable part of your plan—especially when combined with other strategies.
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