A recent study supported by the American Council of Life Insurers (ACLI), and conducted by economists Mark Warshawsky and Gaobo Pang, reveals that retirees could see better financial outcomes by incorporating annuities into their retirement income strategy, rather than relying solely on the traditional “4% rule.” This research underscores the importance of a diversified approach to retirement, especially in light of market fluctuations, inflation, and the uncertainty around life expectancy.

Their findings show that retirees with $250,000 or more benefit most from combining systematic withdrawals with annuities, which offer steady, predictable income and safeguard against market risks and longevity concerns. For those with smaller savings, a higher level of annuitization creates income stability and reduces the strain on remaining assets, ultimately enhancing financial resilience in retirement. This study not only reinforces the flexibility of annuities but also underscores their role in bridging income gaps as traditional pension plans become less common.

NAIFA and ACLI are advocacy partners, working together to ensure American consumers have continued access to products, services, and guidance to achieve financial security and prosper. To learn more about the recent study and explore additional insights into retirement strategies, visit the ACLI page.