Social Security and Annuities: How They Work Together

Social Security is the foundation of most retirement income plans. It's guaranteed, inflation-adjusted, and lasts as long as you do — but for most retirees, it doesn't cover all the bills on its own.

Annuities can fill the gap between Social Security and your essential monthly expenses. Together, these two guaranteed income sources can fully cover your fixed costs, freeing your investments to grow for discretionary spending and long-term goals.

This 'income floor' strategy reduces the pressure to sell investments during a down market — one of the biggest threats to a sustainable retirement.

Timing matters too. Delaying Social Security to age 70 increases your benefit by about 8% per year past full retirement age. An annuity can bridge the gap between when you stop working and when you start collecting Social Security.