If retirement planning were simple, everyone would just follow a rule of thumb, set it, and ride off into the sunset. Unfortunately, real life insists on being… real.

Markets move. People live longer than expected. Spending doesn’t follow neat little spreadsheets.

That’s why more conversations today are shifting from “How do we grow wealth?” to a more important question:

How do we turn wealth into reliable income that lasts?

And this is exactly where annuities start to matter.

The Problem Most Retirement Plans Quietly Ignore

A lot of traditional retirement strategies rely heavily on market-based withdrawals. Think the classic “4% rule” approach.

The issue? It assumes a level of predictability that simply doesn’t exist.

• Markets don’t deliver steady returns
• Inflation changes the game
• Longevity risk is very real

Even the research behind the 4% rule has been increasingly questioned as conditions evolve.

In other words, relying solely on investments to generate income can feel a bit like trying to time the weather. You might get lucky. You might not.

What Changes When You Introduce Annuities

According to J.P. Morgan’s research, incorporating annuities into a retirement strategy can meaningfully improve outcomes.

One key finding:
Adding an annuity allocation increased the probability of sustaining a $45,000 inflation-adjusted income from 85% to a higher success rate compared to investments alone.

Translation:
More certainty. Less guesswork.

That’s because annuities aren’t trying to win the market. They’re designed to do something much more practical:

Provide a consistent income stream you can’t outlive.

Why That Works (Even If It Feels Counterintuitive)

Insurance companies operate differently than individual investors.

They pool risk across thousands of people, allowing them to:

• Account for varying lifespans
• Smooth out market volatility
• Deliver income with greater predictability

This structure often allows annuities to generate more reliable lifetime income than an individual portfolio alone could safely support.

It’s not magic. It’s math… just math most people don’t have access to on their own.

The Real Benefit Isn’t Just Financial

There’s also a human side to this.

Studies show that retirees with guaranteed income sources:

• Feel more confident about spending
• Worry less about market swings
• Experience less financial stress overall

Which makes sense. When part of your income is predictable, the rest of your portfolio doesn’t have to carry the entire burden.

Who Might Benefit Most

J.P. Morgan highlights several types of individuals who may benefit from incorporating annuities, including:

• Those nearing retirement who want income stability
• Individuals concerned about outliving their savings
• Investors looking to balance growth with protection
• People without access to a traditional pension

In other words, people who would prefer their retirement income plan to feel more like a paycheck… and less like a science experiment.

It’s Not “Annuities vs. Investments”

This is where things often get misunderstood.

The conversation isn’t about replacing investments with annuities.
It’s about combining them intentionally.

Research continues to show that pairing:

• Market-based investments (for growth and flexibility)
• With annuity income (for stability and longevity protection)

…can create a more balanced and resilient retirement strategy.

A More Thoughtful Approach to Retirement Income

At Freedom Financial, we don’t look at retirement as a single decision. It’s a series of trade-offs:

• Growth vs. protection
• Flexibility vs. certainty
• Today’s lifestyle vs. long-term sustainability

Annuities are simply one tool in that conversation. But for the right situation, they can play a meaningful role in helping turn savings into dependable income.

Because at the end of the day, retirement isn’t just about having enough.

It’s about knowing your plan is built to last.

Source – https://am.jpmorgan.com/us/en/asset-management/adv/investment-strategies/annuity-essentials/annuities-improve-outcomes/

Insurance products are offered through the insurance business Freedom Financial Group. Freedom Financial Group is also an Investment Advisory practice that offers products and services through AE Wealth Management, LLC (AEWM), a Registered Investment Adviser. AEWM does not offer insurance products. The insurance products offered by Freedom Financial Group are not subject to Investment Advisor requirements. Investing involves risk, including the potential loss of principal. Any references to protection, safety or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier. This article is meant to be general and is not investment or financial advice or a recommendation of any kind. Please consult your financial advisor before making financial decisions. 3927910 – 4/26