5 Reasons You May Need an Annuity

Updated: November 13, 2025

An annuity can help protect and grow your retirement savings so you can do more of what you love in retirement. Here are five reasons an annuity may be a beneficial part of your plans for retirement:

1. Annuities can provide steady, guaranteed income

 

These days, people are living longer. The number of people ages 65 and older is projected to increase significantly in the coming decades.¹ This means your retirement could last more than 20 years.

This also means your money needs to last longer.

Traditional retirement strategies may not be enough. So even though you’ve diligently saved for retirement, and Social Security benefits are available to you, you may want to consider another source of income you can count on, like an annuity.

2. You can choose when to begin receiving income

 

With annuities, you can decide when you want to begin receiving income, and in most cases, you don’t even have to decide in advance. Whether you need income today or sometime in the future – you can determine what’s best for you.

3. Fixed annuities can provide stability for your overall portfolio

 

With most fixed annuities, you can count on getting out what you put in – sometimes even more. This type of option can help balance your other investments that may be more sensitive to market swings. No matter how the stock and bond markets perform, you’ll typically receive at least a minimum return from a fixed annuity in your portfolio.

4. Deferred annuities can make your portfolio more tax efficient

 

Many investments require you to pay taxes each year on what you earn, but with deferred annuities, you’ll only be taxed on the growth when you take out money in the future.

Having an additional tax-deferred investment in your portfolio means you can help minimize the taxes you pay each year.

5. You can customize annuities based on your financial goals and needs

 

Annuities are not one-size-fits-all. There are a variety of options to consider – ranging from products that focus on growth potential to products that offer steady, guaranteed future income. Work with a financial professional to find out if there’s an annuity that fits your needs.