Most people dream about living a long and fulfilling retirement, free of financial worries. But we know that there are very real threats to our retirement nest eggs. The challenge lies in protecting our retirement goals and dreams from risk. This guide is here to help you learn more about one of the most viable nest egg protection tools available — variable annuity lifetime income benefits that provide a guaranteed income stream for life.

Why Your Retirement Nest Egg Needs Insuring

Any investor who has witnessed the damage done to their portfolios by recent periods of financial market upheaval needs no reminder of how difficult it can be to navigate the road to, and through, retirement. It’s a road fraught with uncertainty and unanticipated obstacles.

The good news is that the average 65-year-old retiree today can expect to live another 20 years, and there’s a 25% chance that for a couple, one spouse will live past age 95. But with longer life expectancies come huge big-picture questions about our financial futures: Is my retirement nest egg big enough to provide a comfortable level of income for my entire life? Will I outlive my assets?

How a person answers those questions depends largely on the steps they take to protect their nest egg from longevity risk (the risk of outliving your retirement savings) and financial market risk (the risk a market downturn will do irreparable damage to a retirement portfolio). These are two of the biggest threats to a retirement portfolio.

In light of those risks, financial experts now recommend that investors consider allocating a portion of their retirement savings to insurance-based products such as variable annuities that carry optional features known as lifetime income benefits — LIBs for short. For a fee, such a feature (also known as a guaranteed lifetime withdrawal benefit, or GLWB) provides the owner of the annuity contract with a guaranteed stream of income, for life.

Read on to find out exactly how lifetime income benefits work, what they cost, whether they’re suitable for you, and if so, how to find one that best fits you and your financial situation.