Written by Stina Antonopoulos
Founder of Roots & Wealth | Retirement Income Planning | Author of What If?

Why Retirement Income Needs More Than Hope

Saving money for retirement is important. But saving the money is only the first part of the job.

The next question is:

How do you turn your savings into income without running out of money?

This can be harder than it sounds.

The First Years of Retirement Matter

When you are working, you may have time to wait for the stock market to recover after a bad year.

Retirement is different.

You may need to take money out of your account every month to pay for food, housing, healthcare and other expenses. If the market falls while you are also taking money out, your account may have a harder time recovering.

This is called sequence-of-returns risk.

The words sound complicated, but the idea is simple:

The order in which good and bad market years happen can change how long your money lasts.

Dr. Wade Pfau’s research discusses this problem as a type of “butterfly effect.” A small change at the beginning of retirement can create a very large difference later.

In one historical example, two people retired only one year apart. They started with the same amount of money and followed the same withdrawal plan. However, one experienced a market loss during the first year. That early loss helped create a difference of more than $800,000 between the two accounts later in retirement.

This does not mean the same thing will happen to everyone. It shows why market timing can become much more important when someone is taking retirement income.

Think of Your Retirement Money as Two Buckets

One simple way to think about retirement is to divide the job of your money.

Bucket One: Money for Income

This bucket helps pay regular monthly expenses.

Some people use an annuity with a lifetime-income benefit for this part of their plan. It may provide income for life as long as the contract rules are followed.

This can work like creating a personal retirement paycheck.

Bucket Two: Money for Growth

The second bucket may remain invested for future needs, emergencies or money someone hopes to leave to their family.

When part of the monthly income is coming from an annuity, there may be less pressure to sell investments during a bad market.

Dr. Pfau’s research found that combining investments with certain annuity strategies may help support retirement spending while also helping preserve other assets. The annuity acted like the “workhorse” of the plan by carrying part of the income responsibility.

This Does Not Mean Putting Everything Into an Annuity

An annuity is not automatically the right answer for everyone.

There are many kinds of annuities. They can have different:

Fees

Income rules

Withdrawal limits

Market risks

Protection levels

Surrender periods

Some structured variable annuities offer protection against a certain amount of market loss. However, that protection may be limited. If the market falls more than the protected amount, the owner can lose money.

Lifetime-income guarantees also depend on the terms of the contract and the financial strength and claims-paying ability of the insurance company.

This is why the details matter.

The Real Goal

The goal is not to chase the highest possible return.

The goal is also not to place every dollar into one product.

The goal is to create a plan where:

Your regular expenses can be paid.

Your money has an opportunity to grow.

A bad market does not control your entire retirement.

You can keep money available for unexpected needs.

You may still be able to leave something behind.

A good retirement plan should help you sleep at night.

It should also be simple enough that you understand what your money is doing, what is guaranteed and what is not.

You should never have to buy something simply because someone tells you it is good. You should understand why it may—or may not—fit your personal situation.

Source

This article is an original educational summary based on research by Wade D. Pfau, Ph.D., CFA®, RICP®, including Supporting Client Goals in Retirement: The Role of Structured Annuities With Living Benefits, as summarized in Equitable’s Dr. Wade Pfau’s Final Frontier: Retirement Income Challenges and the Role of Structured Annuities for Lifetime Income and Wealth Preservation.

The underlying Equitable document is marked “For financial professional use only. Not for distribution to the public.” This article does not reproduce the source document, product tables or illustrations.

Educational Disclosure

This information is for general educational purposes only. It is not investment, tax, legal or financial advice. Annuities are long-term financial products and may include fees, withdrawal restrictions, surrender charges and market risk. Guarantees are subject to the terms of the contract and the claims-paying ability of the issuing insurance company. Individual needs and results will vary.

Ready to Take the Next Step?

Retirement isn't just about numbers. It's about the life you've worked so hard to build.

Whether your dream is traveling more, spending time with your grandchildren, supporting the causes you care about, or simply enjoying the peace of knowing your bills are covered, your financial decisions today can shape the future you envision.

I believe every family deserves honest guidance, thoughtful education, and a retirement strategy built around their unique goals—not a one-size-fits-all recommendation.

Throughout my career, I've had the privilege of helping individuals and families navigate important financial decisions involving retirement income, life insurance, annuities, mortgages, and real estate. One thing I've learned is that every family's story is different, and every retirement plan should be too.

Before we ever talk about products or strategies, I want to understand you.

What does financial freedom mean to you? What are your biggest concerns? What kind of legacy do you hope to leave? Those conversations are the foundation of every recommendation I make because the best plans begin with listening.

My role isn't to tell you what to do. My role is to educate you, simplify complex financial decisions, and help you feel confident in the choices you make for yourself and your family.

Whether you're just beginning to plan for retirement or looking for a second opinion on your current strategy, I'd be honored to be a resource for you.

Why "Roots & Wealth"?

When I chose the name Roots & Wealth, it wasn't just because it sounded good. It reflects what I believe financial planning should be.

Just like a strong tree, lasting financial security begins with strong roots.

Those roots are built through education, thoughtful planning, meaningful conversations, and decisions that align with your values. Wealth isn't only about the size of your portfolio—it's about having choices, creating stability, protecting the people you love, and living with confidence.

Life will bring changing seasons. Markets will rise and fall. Tax laws will change. Unexpected challenges will happen. But when your financial foundation is built on strong roots, you're in a better position to weather those changes and continue growing.

That's the philosophy behind everything I do.

My goal is to help you build a retirement strategy that's deeply rooted in what matters most to you, so you can enjoy today while creating a lasting legacy for tomorrow.

If you're ready to build a retirement strategy with confidence and clarity, I'd love the opportunity to meet you. Schedule your complimentary Retirement Strategy Consultation and let's start growing your Roots & Wealth together.

Educational Disclosure

This article is for educational purposes only and is not financial, tax, or legal advice. Annuity products are insurance contracts. Guarantees are backed by the claims-paying ability of the issuing insurance company. Product availability, rates, surrender schedules, withdrawal provisions, riders, caps, participation rates, spreads, and other terms vary by carrier and state. Withdrawals may be subject to surrender charges, taxes, and, if taken before age 59½, potential IRS penalties. Fixed index annuities are not stock market investments and do not directly participate in any stock or equity index. You should review your personal situation with a qualified professional before making a decision.