Retirement Income
Annuities
Guaranteed income that lasts as long as you do.
Social Security helps, but for most people it isn't enough to cover all retirement expenses. And a 401(k) or IRA can run out. An annuity is the only retirement product that can guarantee you will not outlive your income — no matter how long you live.
Planning retirement income? Try our free RMD Calculator, Annuity Break-Even Calculator, or Long-Term Care Cost Calculator.
Nearly half of Americans think it's somewhat or very likely they will outlive their savings.
Northwestern Mutual Planning & Progress Study, 2026
The amount Americans say they need to retire comfortably in 2026 — up $200,000 from last year.
Northwestern Mutual, 2026
A 30-year retirement is increasingly the standard planning horizon for today's retirees.
PensionBee / InvestmentNews, 2026
Three types of annuities — in plain English
Annuities aren't one-size-fits-all. The right type depends on whether your priority is growth, protection, or guaranteed income.
Annuity type 1
Fixed Annuity
A fixed annuity credits a guaranteed interest rate for a set period — similar to a CD, but inside an insurance contract. Your principal is protected and your growth is predictable.
- Guaranteed interest rate for a defined term
- No market risk — your principal cannot decrease
- Predictable, steady growth you can plan around
- Tax-deferred growth until you begin withdrawals
Best for
Conservative savers who want certainty — people approaching retirement who can't afford to watch their savings drop in a down market.
Annuity type 2
Fixed Indexed Annuity
A fixed indexed annuity links your growth to a market index — like the S&P 500 — without directly investing in the market. You participate in some of the upside when markets rise, but a floor prevents losses when they fall.
- Growth potential tied to a market index
- Floor protection — you cannot lose principal to market drops
- Upside participation capped or spread via a rate (varies by product)
- Tax-deferred growth with optional income riders
Best for
People who want growth potential without market risk — those who've watched their retirement accounts drop in past recessions and want a better floor under their savings.
Annuity type 3
Income Annuity (SPIA / QLAC)
An income annuity converts a lump sum into guaranteed monthly payments for life. It can start immediately (SPIA) or be deferred to a later date (QLAC). This is the closest thing in the private market to a personal pension.
- Guaranteed monthly income for life — cannot run out
- Can start immediately or be deferred years into the future
- Optional joint-life payout to cover a spouse
- QLACs can reduce required minimum distributions (RMDs)
Best for
People who want a personal pension they control — especially those with essential monthly expenses (mortgage, utilities, food) they want guaranteed regardless of market performance or lifespan.
Annuity type 4
Long-Term Care Annuity (Hybrid LTC)
Long-term care costs average $180,000 per claim and rising (NAIC/Milliman, 2024). A hybrid LTC annuity addresses that risk without the "use it or lose it" concern of standalone LTC insurance. Your premium builds a guaranteed asset that can be accelerated to pay for qualifying care — nursing home, assisted living, or home health — if and when you need it. If you never need care, the full value passes to your beneficiaries.
- Principal-protected base with guaranteed growth
- LTC benefit pool — typically 2–3× your premium — covers qualifying care costs
- No "use it or lose it" — unused value passes to beneficiaries
- Simplified underwriting (varies by carrier and health status)
Best for
Those who want LTC protection but are reluctant to pay standalone LTC premiums for coverage they may never use. A hybrid annuity turns that premium into a guaranteed asset either way.
A note on how we work with annuities
Annuities are insurance products, not investments. We are licensed insurance agents, not investment advisors. Annuity suitability depends on your full financial picture — your income needs, other retirement assets, time horizon, and health. We always review your situation holistically before making any recommendation, and we will never suggest an annuity that isn't in your best interest to buy.
Annuity questions, answered plainly
Are annuities only for wealthy people?
No. Annuities are available starting at relatively modest minimums and are often used by middle-income retirees who want to guarantee their essential expenses are covered regardless of what the market does. The goal isn't wealth — it's certainty.
What's the difference between an annuity and a 401(k)?
A 401(k) is an accumulation vehicle — it grows your money. An annuity is primarily an income vehicle — it turns your money into guaranteed payments. Many people use both: a 401(k) or IRA to accumulate assets, and an annuity to convert a portion of those assets into income they cannot outlive.
Can I get my money back if I change my mind?
Most annuities have a surrender period — typically 5 to 10 years — during which early withdrawal may carry surrender charges. After the surrender period ends, you generally have full access to your value. We always review surrender schedules with clients before recommending any specific product.
Related reading
Schedule a free retirement income conversation
We review your full retirement picture — Social Security, existing savings, expected expenses — and show you whether an annuity fits, which type, and from which carrier. No charge, no obligation.
Hougom Insurance Agency · 115 10th Ave S, Suite A · Onalaska, WI 54650
Annuities are insurance products issued by insurance companies and are not FDIC insured, not bank guaranteed, and may lose value in variable products. Fixed and fixed indexed annuities protect principal from market loss but are subject to carrier financial strength and surrender charges during the surrender period. We do not offer every product available in your area. Any information we provide is limited to those products we do offer. This page is for general educational purposes only — not investment, tax, legal, or financial planning advice. Hougom Insurance Agency is a licensed independent insurance agency (NPN 20742808).