How To Incorporate Annuities Into Your Retirement Portfolio

April 15, 2023


My career started as a firefighter, but after my own defined benefit pension was replaced, I began researching other avenues for protecting my family and me in retirement. It took me 7 years of research to finally find an answer that closely mimics the defined-benefit pensions that have gone by the wayside for approximately 75% of working Americans.  I’m still amazed that more advisors do not recommend annuities, but I think I have a better understanding of why they don’t.  

First, it comes down to how financial advisors get paid.  It is in their best interest to risk your money and get paid a quarterly “management” fee.  I emphasize management because unless you are a multi-millionaire, no one is “managing” your money.  It is put into an account that is set to an algorithm that makes trades at certain benchmarks based on your risk tolerance.  Anyone can do that. 

My point is when you fund an annuity, the advisor that set it up gets paid a one-time commission from the annuity company (not out of your pocket), so now they have to go help someone else to continue making income.  It is in their best interest not to help you fund an annuity.  Basically, they want you to be their annuity that pays them forever instead of them giving you an annuity that pays you forever.

Second, I have been using annuity strategies for 7 years now, and they can be confusing.  Not only for the clients, but for the advisors.  And most people just don’t want to take the time to understand them. 

In this week’s ATLAS Annuity Newsletter, I want to talk about how to incorporate annuities into your retirement portfolio, especially when it comes to understanding the difference between a Fixed Index Annuity and a Fixed Indexed Annuity with an Income Rider. Sometimes, both products should be used to help you accomplish your retirement goals.

Fixed Indexed Annuities vs. Fixed Indexed Annuities with Income Riders

First, let’s briefly discuss the difference between a Fixed Index Annuity and a Fixed Indexed Annuity with an Income Rider:

  • Fixed Indexed Annuity: A type of annuity that offers the potential for growth based on market performance while protecting your principal from market downturns. These annuities have caps, spreads, or participation rates that determine the gains you can receive.
  • Fixed Indexed Annuity with Income Rider: This is a Fixed Indexed Annuity with an added benefit (the Income Rider) that guarantees a certain level of lifetime income, regardless of how the underlying investments perform.  Another type of Income Annuity is a SPIA (Single Premium Immediate Annuity), and depending on interest rates at the time that you are funding an income annuity, depends on which one would give you the most guaranteed income.  Your advisor should always verify both to make sure you get the highest income possible.

Now that we understand the basics, let’s dive into how to incorporate these annuities into your retirement portfolio.

1. Determine The Purpose of Your Money

Before you can incorporate annuities into your retirement portfolio, you need to have a clear understanding of your retirement goals and needs. This is what I refer to as the “purpose of money”.  At a 30,000-foot view, your money may only serve 3 different purposes in retirement:

  • Guaranteed Lifetime Income
  • Growth & Protection
  • Leaving money behind (legacy planning)


2. Assess Your Risk Tolerance

It’s important to determine your risk tolerance when planning your retirement portfolio.  Some people have enough retirement assets to accomplish all 3 purposes without worry.  While some will have to determine if they are willing to take less of a guaranteed income to leave more of a legacy.  That is 100% a personal decision, but the risk should be weighed.

3. Diversify Your Retirement Portfolio

Just like any investment strategy, diversification is key when incorporating annuities into your retirement portfolio. It’s important not to put all your eggs in one basket. Consider using a mix of Fixed Indexed Annuities and Fixed Index Annuities with Income Riders, as well as other investments like stocks, bonds, and mutual funds to create a well-rounded retirement plan.

Some people think that I am anti-market.  Not even in the slightest.  The market is where you will get massive gains.  But, it is also where you get massive losses.  Annuities act as a parachute when the bottom falls out from underneath you and helps to mitigate the “Sequence of Returns Risk.”

4. Work with a Competent Advisor

Incorporating annuities into your retirement portfolio can be confusing, which is why it’s essential to work with a competent advisor who understands annuities. Not just an advisor who dabbles with them on the side when their client demands protection.  As an annuity expert, I’m here to help answer any questions you may have and guide you through the process.

5. Review and Adjust Your Portfolio Regularly

This is not my area of expertise, but as you progress through your retirement journey, it’s essential to regularly review and adjust your portfolio. Market conditions, personal circumstances, and financial goals can change over time, making it necessary to reevaluate your investment strategy. By staying proactive and making adjustments when needed, you can help ensure that your retirement portfolio remains aligned with your objectives.

Keep in mind that nobody cares more about your money than you do.  You MUST be a proactive player in your portfolio, even if you do not understand the ins and outs of the market.

6. Don’t Overlook the Importance of Guaranteed Income

When incorporating annuities into your retirement portfolio, it’s crucial to recognize the importance of guaranteed income. A Fixed Index Annuity with an Income Rider can provide a steady, guaranteed income stream for life, helping to alleviate concerns about outliving your savings. This can be particularly valuable in today’s uncertain economic climate and as life expectancies continue to rise.

Peace of mind, or “sleep insurance” as I like to call it, is one of those intangible aspects of income annuities that can be hard to grasp unless you have it.  Income annuity owners know they can spend their money freely to enjoy their retirement, without constantly worrying about what the stock market will do, because that guaranteed annuity income is going to show up month after month, year after year, no matter what happens in the economy.

Not to mention, there has been study after study that shows income annuities actually IMPROVE the overall performance of a managed portfolio.  I made a whole video on that subject that you can view by clicking here.

7. Consider Tax Implications

Annuities can offer certain tax advantages, such as tax-deferred growth that is not subject to RMDs. However, it’s essential to understand the tax implications of incorporating annuities into your retirement portfolio. Consulting with a tax professional or financial advisor can help you make informed decisions that align with your overall financial strategy.

8. Keep an Open Mind and Stay Informed

The world of annuities can be complex, and it’s important to keep an open mind and stay informed about the latest products and strategies. As an annuity expert, I’m committed to providing the most up-to-date information to help you make the best decisions for your retirement. Be sure to check out our ATLAS Annuity Rate Reports and other resources to stay informed about the latest annuity trends and insights.


Incorporating annuities into your retirement portfolio can be a smart move to help protect your retirement nest egg and ensure you have a steady stream of income during your retirement years. By understanding the difference between Fixed Indexed Annuities and Fixed Indexed Annuities with Income Riders, assessing your risk tolerance, diversifying your portfolio, and working with a competent advisor, you’ll be well on your way to a secure retirement.

I’m always available to answer questions about incorporating annuities into your retirement strategy, so don’t hesitate to Contact Me. I’m here to help you make informed decisions and ensure you’re on the right path to achieving your retirement goals.

When you begin the journey of how to incorporate annuities into your retirement portfolio I highly recommend that you reach out for your personalized ATLAS Annuity Strategy. My mission at ATLAS Financial is to help you achieve the secure and enjoyable retirement you deserve.

All the best,


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Watch this short video series to learn which annuities I use and how I use them to get an average of 20% more spendable retirement income than any other advisor plans you've seen.

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