One of the most common fears people share when considering retirement is the very real possibility of outliving the money they’ve worked so hard to save.

No two people heading into retirement have the same set of needs, preferences, or goals. That’s why there are different types of annuities from which you can choose. Adding an annuity to your overall retirement portfolio can provide you with several valuable benefits, including protected lifetime income. 

A new glossary of plain-English definitions and descriptions about annuities aims to make annuities and their benefits more easily understood, transparent and intuitive.

When you reach retirement, you expect to reap the rewards for decades of hard work and diligent saving so you can live happily ever after. 

An annuity is simply a contract between you and an insurance company where you contribute money upfront, then receive payments over a period of time. You can receive those payments a variety of ways, including an income stream that lasts your whole life. 

Annuities are flexible products and, depending on the type, can meet needs for protected lifetime income, growth and downside protection.

Key points to discuss with your financial professional about protecting your retirement income

The first step in developing a successful income plan for retirement is understanding your options. Here are nine points you should discuss with your financial professional to make sure you’re on track for the retirement you want.

Many retirees want more covered than just their essential needs. That means they might be rethinking how much guaranteed income they need for a comfortable retirement.

Everyone needs a steady retirement income to cover the basics: shelter, clothing, food, transportation and healthcare. But what about wants beyond those five basic needs? 

Thinking about retirement income can be a challenge: You don’t want to use your resources too  quickly and run out of money, but you also don’t want to scrimp and save and reduce your lifestyle if it’s not necessary. So how do you find the balance? Begin by gathering a little bit of information.

Annuities come in a variety of types, and there are many different ways to structure them depending on your needs. There are three primary categories of annuities. Here is a quick overview of each type.

The Alliance for Lifetime Income’s 2020 Protected Lifetime Income Study – the largest protected income study of its kind – finds that Americans are more anxious now about their retirement savings, with nearly half (49%) of pre-retirees concerned their retirement savings and sources of retirement income won’t last through retirement.

Check off the Basics is a simple retirement planning approach that focuses on covering the various essential expenses people often need to cover in retirement, including things like a mortgage, utilities, groceries and transportation. And you decide what’s essential. You might not have a mortgage in retirement, for example, but you might have rent, condominium fees or home maintenance costs.