We used AI To Fact-Check Our New Annuity Calculator

This document outlines a comprehensive income annuity strategy for retirement, comparing market-only assets with combined market and annuity approaches over various time horizons.

Overview of Strategy

  • The strategy begins with a $2.5 million portfolio, allocating $250,000 to an income annuity providing guaranteed lifetime income. ​
  • The approach aims to reduce sequence of returns risk by supplementing market assets with a guaranteed income stream, allowing the portfolio to grow more exponentially over time.
  • Income needs exceeding the annuity payments are drawn from the market, with any surplus income reinvested, enhancing growth potential. ​
  • All annuity quotes assume guaranteed lifetime income, making total portfolio value plus ongoing income relevant in scenario analysis. ​

Performance and Results

  • The report compares four scenarios: market-only, using an annuity for guaranteed income, and two worst-case and best-case 20-year periods.
  • In the best 20-year period, the market-only portfolio grows significantly, but the combined strategy yields a higher ending balance due to reinvested excess income and reduced risk.
  • In the worst 20-year period, the market-only portfolio declines sharply, while the annuity strategy preserves more value, demonstrating risk mitigation.
  • Over the last 20 years, the combined approach consistently outperforms market-only in remaining balance, with the highest ending value, followed by the scenario with guaranteed income, then the worst-case scenario, and finally the market-only.

Historical Context and Impact

  • The report includes historical market returns from 1927 to 2019, illustrating how the strategy performs through various economic cycles, including severe downturns like the Great Depression.
  • The strategy’s design leverages guaranteed income to buffer against market downturns, allowing the remaining portfolio to recover and grow more robustly over time.
  • The approach emphasizes the exponential advantage of reducing sequence risk, especially over long horizons, by blending guaranteed income with market assets. ​

Legal and Disclaimers

  • The report is prepared by annuitystraighttalk.com, licensed nationwide, and assumes guaranteed lifetime income from annuities.
  • It highlights the importance of understanding the reduced risk and potential for higher long-term growth when combining annuities with market investments.
  • The document underscores that the strategy’s success depends on proper allocation, reinvestment of excess income, and market performance, with historical data supporting its effectiveness.

Overall, the document advocates for a balanced retirement income approach that combines guaranteed annuity income with market assets to optimize growth, reduce risk, and ensure sustainable income over a lifetime.

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Last Updated on April 2, 2026 by Bryan Anderson