1. Where Does Retirement Income Come From?

Retirees typically rely on multiple sources of income and understanding the role each one plays can help you build a solid plan.

According to the Federal Reserve, the Social Security Administration, and independent researchers, the largest source of retirement income for most Americans is Social Security, followed by personal savings, pensions, and 401(k)/IRA accounts. Here’s a breakdown:

• Income to Cover Living Expenses
  • Less than 50% of pre-retirees expect to receive enough income from lifetime-guaranteed income sources to cover their household’s basic living expenses (Source: “2024 Retirement Investors: Behaviors, Attitudes, and Financial Situations”, LIMRA).
• Social Security – A Good Foundation, But Not Enough
  • Social Security provides about 30-40% of the average retiree’s income—but it’s rarely enough on its own (Source: “2021 Retail Retirement Reference Guide”, LIMRA Secure Retirement Institute).
  • As retirees age, Social Security makes up a larger percentage of the average retiree’s income.
  • In 2025, the average monthly Social Security benefit is less than $2,000, though this amount is higher for those who retire at older ages (Source: Social Security Administration).
  • While Social Security is a great starting point, it’s meant to supplement other retirement savings—not be the sole source of income.
• Personal Savings and Investments
  • Many retirees rely on their own savings, including 401(k)s, IRAs, and other investments.
  • The typical personal savings retirement portfolio consists of:
    • Stocks & Bonds (50-60%) – Can grow wealth but come with market risks.
    • Cash Value Life Insurance & Annuities (10-20%) – Provide stability, tax advantages, and predictable income.
    • Other Assets (Real Estate, CDs, etc.) – Additional income sources.
    • Market fluctuations can affect retirement income, making it important to have guaranteed income sources like annuities.
• Pensions & Employer-Sponsored Plans
  • While pensions are less common today, those with them benefit from a guaranteed income for life.
  • Employer-sponsored 401(k) plans are now the primary retirement savings tool, and many companies offer contribution matching.
  • Not everyone has a pension, so having a personal strategy for a steady income is key.

2. The Role of Insurance in Retirement Planning

Many retirees don’t just want income—they want certainty. Insurance products like annuities and life insurance provide important benefits that traditional investments can’t.

• Guaranteed Lifetime Income
  • Single Premium Immediate Annuities (SPIA) and Deferred Income Annuities (DIA) convert savings into a steady paycheck for life, ensuring you never run out of money.
  • Fixed Index Annuities (FIA) with Lifetime Income Riders offer market-linked growth with guaranteed income, balancing safety and potential returns.
• Protection from Market Downturns
  • Unlike stocks and bonds, annuities like MYGA and FIA can’t lose value in a downturn.
  • MYGAs (Multi-Year Guaranteed Annuities) offer a fixed interest rate for a set period, protecting savings from volatility.
• Tax-Deferred Growth
  • With annuities, your money grows tax-deferred, meaning you don’t pay taxes until you start withdrawing funds.
  • This allows for faster growth over time compared to taxable investments.
• Wealth Transfer & Legacy Planning
  • Life insurance policies & annuities can be passed to beneficiaries without going through probate, ensuring a smooth transfer of wealth.
  • Death Benefits provide financial protection for loved ones.
• Long-Term Care & Emergency Access
  • Some annuities and life insurance policies include nursing home and terminal illness waivers, allowing access to funds in case of significant health issues.
• Confidence in a Highly Rated Insurance Company
  • Your money is backed by an insurance company, not the stock market, offering security even in uncertain economic times.

3. Building Your Retirement Plan in 5 Simple Steps

• Step 1: Assess Your Income & Expenses
  • List all potential income sources (Social Security, savings, investments).
  • Estimate your monthly expenses in retirement.
• Step 2: Maximize Savings & Investment Growth
  • Contribute to 401(k)s & IRAs while benefiting from tax advantages.
  • Diversify your investments for both growth and stability.
• Step 3: Consider Annuities for Growth and Income
  • If you need income now → SPIAs provide guaranteed payments immediately.
  • If you want to grow savings with protection → MYGAs and FIAs offer growth potential without downside risk.
  • If you need income later → DIAs provide guaranteed income starting at a future date.
• Step 4: Plan for Unexpected Costs
  • Factor in healthcare expenses & long-term care needs.
  • Use life insurance and annuities with built-in protection benefits.
• Step 5: Consult a Financial Professional
  • Every retiree’s situation is unique—get expert guidance to create a customized plan.

Conclusion: A Retirement Plan That Works for You

Planning for retirement isn’t just about how much you save—it’s about how you structure your income. By combining Social Security, savings, and guaranteed income sources like annuities, you can build a plan that ensures financial stability and peace of mind.

At Investors Life, we offer retirement solutions that fit your goals—whether you’re looking to protect your savings, grow your income, or create a legacy for your loved ones.

Want to explore your options? Contact us today to get started.