The short answer
Longevity risk is the chance that you live longer than your money lasts. A plan built only around an average lifespan can fall short. One approach is building a predictable income floor — income that keeps arriving regardless of how long you live. Certain fixed and fixed-indexed annuities can provide that structured income floor.
“Will I outlive my savings?” is really a question about longevity risk — the chance you live longer than your money lasts. You can’t know your lifespan in advance, so a plan built only around an average can fall short if you live longer than expected. One way to manage that is to build a predictable income floor — income that keeps arriving for as long as you live.
Where an annuity can fit
Some fixed and fixed-indexed annuities can be set up to pay income for the rest of your life, creating a floor under your essential expenses. That lifetime guarantee is backed by the issuing insurance company's claims-paying ability, not the FDIC, so the financial strength of the insurer matters.
Some fixed and fixed-indexed annuities can be set up to pay income for the rest of your life. That can turn a portion of your savings into a paycheck you can’t outlive — a floor under your essential expenses. It’s worth being precise: that lifetime guarantee is backed by the issuing insurance company’s claims-paying ability, not the FDIC, so the strength of the insurer matters.
The trade-offs, plainly
- Access: committing savings to lifetime income usually means giving up some flexibility with that money.
- Inflation: a level income stream can buy less over time unless it’s designed to account for that.
- It’s not the whole plan: an income floor is one piece; savings, Social Security timing, and spending all interact.
A balanced way to think about it
Many people don’t convert everything — they cover the essentials with a dependable floor and keep the rest flexible for emergencies, opportunities, and the things that make retirement worth it. Whether an annuity belongs in your plan, and how much, depends on your situation. Our job is to lay out the trade-offs honestly and let you decide.
Common questions
What does "outliving your savings" actually mean?
It is the risk that you live longer than the money you saved for retirement lasts. Because none of us knows our exact lifespan, planning only to an "average" can leave a gap if you live longer than expected. This is sometimes called longevity risk.
How can an annuity help with longevity risk?
Certain fixed and fixed-indexed annuities can be structured to pay income for the rest of your life, which can create a predictable "floor" of income you cannot outlive. That guarantee is backed by the issuing insurance company's ability to pay — it is not FDIC-insured.
What are the trade-offs?
Turning savings into lifetime income usually means giving up some access to that money, and a fixed income stream can lose buying power to inflation over time. An annuity is one tool among several — it is not a complete plan by itself, and it is not right for everyone.
Do I have to convert all my savings?
No. A common approach is to cover essential expenses with a predictable income floor and keep the rest flexible. How much, if any, makes sense depends on your situation. We help you think it through; we do not push a product.
Related: What a fixed annuity guarantees · Caps & participation rates, explained · Annuities, explained