Guaranteed Income For Life
Make it last
Guaranteed Income for Life
“Too good to be true?”
Peace of Mind. For the Years That Matter Most.
Retirement isn’t just about stepping away from work — it’s about enjoying the years ahead with confidence, stability, and peace of mind. Whether your vision includes travel, time with family, or simply freedom from a rigid schedule, dependable income is the foundation that supports it all.
At Evergreen Wealth & Co., we help you build retirement income you can count on for life. Many retirees worry about outliving their savings, but with the right strategy, you can create predictable income that lasts as long as you do.
The 4% Rule – Does It Still Work Today?
For years, the “4% rule” served as a basic guideline for retirement withdrawals: take 4% of your portfolio each year, adjust for inflation, and your money should last 30 years. While this framework made retirement planning feel simple, today’s economic environment has changed — and financial experts are re-evaluating what “safe” really looks like.
Recent research from Morningstar and PGIM DC Solutions suggests a safer starting withdrawal rate closer to 3.7%, due to factors like:
Lower long-term bond yields
Higher market valuations
Longer life expectancies
Even with a reduced withdrawal rate, traditional investment accounts remain exposed to market volatility. This means account values can decline during downturns — increasing the risk of running out of money if withdrawals continue unchanged.
A Closer Look at Your Income Options
Approach 1:
Updated 4% Rule Strategy
Required Principal Example:
To generate $40,000/year under the traditional 4% rule, a retiree would need approximately $1,000,000 in retirement assets.
What the Latest Research Shows
Morningstar’s updated research now recommends a 3.7% safe withdrawal rate for new retirees.
PGIM DC Solutions raises similar concerns and recommends “guided spending rates” based on current market conditions.
What this means:
If you withdraw 3.7% instead of 4%, you would need approximately $1,081,000 — not $1,000,000 — to generate the same $40,000/year.
Key Considerations
A traditional managed investment account may offer:
High liquidity
Significant long-term growth potential
However, it also carries:
Exposure to market risk
A possibility of running out of income if markets underperform
A need for more starting capital under updated research
Approach 2:
Fixed Indexed Annuity
Required Principal Example:
With a fixed indexed annuity — assuming withdrawals begin after five years — a retiree may need approximately $570,000 to generate $40,000/year for life.
Key Benefits
A fixed indexed annuity can offer:
Protection of principal from market loss
Guaranteed lifetime income (in this example, a 7% withdrawal rate)
Predictable income regardless of market performance
Key Considerations
Compared to a traditional investment account, annuities may have:
Less liquidity
Limited upside potential
However, the tradeoff is greater stability and income assurance.
Key Takeaway:
Updated research suggests that safe withdrawal rates in traditional investment accounts may now be lower than the familiar 4% rule — requiring more capital and still exposing retirees to market risk.
Fixed indexed annuities offer a different path: guaranteed income, protection from market loss, and less required principal to generate the same income level.
For retirees who value stability, longevity, and predictable income, a fixed indexed annuity may be a compelling option to consider within a broader retirement plan.