Retirement: A shifting landscape 

The challenges of retirement are changing, and the numbers tell the story. Every day, more than 11,000 Baby Boomers turn 65¹—and many are retiring earlier than planned, often for reasons outside their control.² People are also living longer: The number of Americans who will reach age 100 is projected to quadruple over the next 30 years.³

At the same time, traditional pensions have largely disappeared, and the long-term future of Social Security remains uncertain. The responsibility of funding a retirement—one that could last 30 years or more—has shifted from employers to individuals. That shift raises a question that keeps many Americans up at night: How do you turn hard-earned savings into reliable income that will last for the rest of your life?

That’s where annuities come in. Annuities are insurance products designed to turn savings into a stream of guaranteed lifetime income⁴—essentially a personal pension you create for yourself. They can help address three of the biggest financial risks retirees face: outliving their savings, market volatility, and rising healthcare costs. 

Yet for years, annuities had a reputation problem. They were viewed as expensive, complex products that locked up your money and weren’t always sold with the investor’s best interests in mind. But the industry has changed significantly.  

Why today’s annuities are different

Modern annuities have changed in a fundamental way: They are built without embedded sales commissions. These commission-free products offer lower costs, greater transparency, and more flexibility. They make it easier for fiduciary advisors to evaluate annuities based on what’s best for the client, not what pays out the highest commission.

Commission-free annuities can work alongside other investments in a financial plan—like stocks and bonds—serving as a powerful tool for retirement income. Many leading retirement researchers recommend using income from an annuity to help cover essential expenses such as food, housing, transportation, and healthcare. 

Think of it as a retirement paycheck providing predictable, recurring income you can count on to cover the basics, no matter what the markets are doing. When your essential expenses are covered, any extra spending feels like a choice rather than a risk.

More ways annuities can support retirement stability

While guaranteed lifetime income may be the most obvious benefit associated with annuities, they also can offer several advantages that help a retirement portfolio work harder and smarter:

• Tax-deferred growth: Annuities can be an effective tool in your planning strategy, as your earnings grow on a tax-deferred basis until withdrawal. This means more of your money stays invested and continues compounding rather than paying annual taxes. 
• Market protection with upside potential: One type of annuity, a Registered Index-Linked Annuity (RILA), can help preserve assets from loss due to market downturns while still allowing participation in gains when the market performs well.
• Competitive yields: Multi-Year Guaranteed Annuities (MYGAs), a type of fixed annuity, often offer higher interest rates than comparable CDs—plus the added benefit of tax deferral, enabling growth to compound over time.
• Social Security optimization: An annuity can be used to provide income after your regular paycheck ends at retirement and before Social Security payments begin. This “bridge” allows you to delay claiming Social Security until age 70, which significantly increases your monthly payment for the rest of your life.

If you already own an annuity, it may be time for a review

Many people own older, commissioned annuities that may have high costs or benefits that no longer align with their financial goals.

Wealth Enhancement advisors have access to specialized technology that allows them to quickly and objectively evaluate existing annuity contracts. When appropriate, these contracts can be transitioned to a commission-free alternative that can lower costs and potentially improve benefits to better meet goals of your financial plan. 

How modern annuities fit into a broader retirement plan

Commission-free annuities are designed to complement traditional investments, not replace them. They can add income stability with insurance guarantees and confidence in retirement. By providing a stream of secure income you can’t outlive, they can free up the rest of your portfolio to be invested for growth or legacy objectives.

For retirees concerned about market or economic uncertainty, commission-free annuities offer something increasingly rare: predictability. This helps explain why the appeal of annuities is growing—interest remains historically high, with more than half of pre-retirees and retirees saying they would be interested in converting a portion of their assets to an annuity.⁵ 

Your next step—ask a specialist

When it comes to retirement income planning, having guidance can make all the difference. Through Wealth Enhancement’s partnership with DPL Financial Partners, your advisor can walk you through where modern annuities may fit within your financial plan and review commission-free solutions tailored to your needs and goals. Click here to connect with a Wealth Enhancement advisor.

1. U.S. Census Bureau, 2019.
2. Gallup, 2024.
3. Pew Research Center, 2024.
4. Guarantees are based on the claims paying ability of the issuing company.
5. LIMRA, 2024.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

DPL Financial Partners does business in the state of California as DPL Insurance Solutions under California License #0M42434. Securities offered through Johnstone Brokerage Services (JBS). Member FINRA/SIPC. 

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