Income annuities convert your retirement savings into guaranteed lifetime income starting immediately or in the future
An income annuity is a lifetime income guarantee that you purchase from an insurance company as a way to reduce the risk that you run out of money in retirement. Just like you insure your home, you can insure your longevity by passing on the risk that you outlive your savings to an insurance company.
There are many ways to fund an income annuity — years before retirement, at retirement, over time, etc. — but they all provide you with the same thing: a guaranteed, steady lifetime-income stream when you retire that simplifies your retirement spending and offers peace of mind that you will not outlive your savings. You can think of it like a pension you buy for yourself.
All annuities are built on this core concept; however, annuities can be complicated by various features, bells, and whistles that make them harder to understand, challenging to evaluate, and, in our opinion, less valuable. At Blueprint Income, we provide only income annuities (immediate annuities, longevity annuities, and Qualified Longevity Annuity Contracts) and fixed annuities. These are the simplest of products, offering either guaranteed income (income annuity) or guaranteed return (fixed annuity). They are explicit in what you’ll get in exchange for the money you put in, and they’re the cheapest way to get a guarantee.
Here are the various types of annuities out there:
An annuity is a form of insurance that protects your longevity. When you purchase an annuity you pay an insurance company, who invests your money, and promises to pay you a fixed and guaranteed amount of income starting on a future predetermined date and continuing for the rest of your life.
What makes an annuity an annuity is its ability to provide guaranteed, lifelong income in retirement. Some annuities exist to do only that, while others have that as just an option. The former (provides income and income only) is called an income annuity. There are three types of income annuities:
The other type (has the option but not requirement) to provide income is known as a deferred annuity. There are three types of deferred annuities:
Blueprint Income offers all types of income annuities, as well as fixed annuities. The Personal Pension is our flagship product that gives you access to all four with subscription-like funding.
Both the Personal Pension and a traditional income annuity guarantee lifetime retirement income, but there are some key differences between the two.
An income annuity may be right for you if:
Annuities, are not, however, designed to be the totality of your retirement nest egg, as they don’t provide everything you need in retirement. In particular, they do not have the potential to provide high stock market returns, and they are typically not indexed for inflation.
For anyone interested in minimizing the risk of running out of money while maximizing the legacy you leave behind, the portfolio strategy that predicts the best outcomes are those with annuities instead of bonds. Read more about our research about retirement portfolio optimization here.
There are three types of income annuities. All provide a steady, guaranteed paycheck for life, but they differ in when that income starts and the money used to fund them. The three types of income annuities are:
Quotes for all 3 types of income annuities are available for free on our website via the Income Annuity Quote Tool. Read on for more information, financial examples, and details about each of the types of income annuities.
| Type | Immediate Annuity | Longevity Annuity | QLAC |
| Starts | Within 1 year | In more than 1 year | In more than 1 year, after age 72, and by age 85 |
| Provides | Guaranteed income for the rest of your life | Guaranteed income for the rest of your life | Guaranteed income for the rest of your life |
| Funded With | Qualified (IRA) or non-qualified (personal savings) money | Qualified (IRA) or non-qualified (personal savings) money | Only qualified money (Traditional IRA or 401(k) rollover) |
An immediate annuity is an income annuity that starts within 12 months. It is funded by giving a lump-sum premium deposit to an insurance company, and in exchange, the insurer promises steady, guaranteed income that continues for the rest of your life. You can think of it like a pension you buy for yourself.
Tip: You might hear this product referred to using a few different names:
Head over to the immediate annuity guide to learn more about these products, see examples of them in action, and get buying tips. When you’re ready, you can get personalized quotes for free in the Immediate Annuity Quote Tool.
A longevity annuity is an income annuity that starts more than 12 months from now. It is funded through a lump-sum premium or recurring deposits over time (as with our flagship product, the Personal Pension). In exchange, the insurance company promises steady, guaranteed income that continues for the rest of your life. You can think of it like a pension you buy for yourself.
Tip: You might hear this product referred to using a few different names:
Head over to the longevity annuity guide to learn more about these products, see examples of them in action, and get buying tips. When you’re ready, you can get personalized quotes for free in the Longevity Annuity Quote Tool.
A Qualified Longevity Annuity Contract, or QLAC for short, is a special type of longevity purchased with tax-deferred savings from your qualified retirement account, such as a Traditional IRA. It provides income starting more than 1 year from now, starting after age 72 but by age 85. It’s the only way to defer required minimum distributions (RMDs) applicable to 401(k)s and Traditional IRAs beyond the age of 72.
Head over to the QLAC guide to learn more about these products, see examples of them in action, and get buying tips. When you’re ready, you can get personalized quotes for free in the QLAC Quote Tool.
Blueprint Income’s flagship product, the Personal Pension, is an easy and diversified way to get guaranteed annuity income. It’s an account that can be opened with as little as $100 and accepts additional contributions of $100 or more flexibly over time. Each contribution buys a mini income annuity from one of our insurance providers, allowing you to diversify your purchases over time and interest rate environments.
Learn more about the Personal Pension here.
It’s now possible to make your income annuity purchase online. Instead of in-person meetings and paper applications, we’ve built the technology to provide you real-time quotes online and generate your application for the insurer digitally. Despite our tech-enabled approach, we’re still fiduciaries, licensed to provide these products to you, and available via chat, email, or phone to provide personalized assistance.
Here is the process to secure your income annuity online:
If you have any questions, don’t hesitate to reach out to our team.
At Blueprint Income, we're working to make the annuity market a simpler and easier space to navigate. Each day we're focused on offering a better service and product that makes sense for you.
A classic, good annuity is one that provides guaranteed income for as long as you live. It’s a way to diversify your portfolio, and make sure that your basic retirement expenses will be covered. But beware of market-based annuities that promise too much and don't deliver good value.
An annuity is guaranteed lifetime income that reduces the likelihood that you’ll run out of money in retirement. Income from an annuity is predictable, steady, and cannot be outlived. This Annuities 101 article provides an overview of annuities and links to resources that will help you decide if an annuity is right for you.