Forecasting your financial future can be difficult, but it doesn’t have to be.

In retirement, we all want to ensure our living expenses are covered while having enough money to enjoy life. Asking the right questions and protecting what matters most can support clarity for a confident future.

Meet Dave and Lynn

In 2027, they’ll both reach their retirement age of 65 and will likely need stable, lifetime income to provide the comfort and protection they’ve worked hard to earn. However, their only source of protected retirement income is Social Security, and they’re wondering if that will be enough.


Let’s take a closer look


This hypothetical example is for illustrative purposes only and is not representative of the past or future performance of any product. Past performance is no guarantee of future results.

What are they protecting?

For Dave and Lynn, preparing for a financially secure retirement includes securing their necessities such as a home, business or car. It also involves taking steps to help ensure they can maintain their high quality of life.

Protecting their health and lifestyle can also be costly, so taking a holistic view of their retirement to ensure they have sufficient income is essential.







And what are they protecting against?

There are several factors that can impact the life Dave and Lynn want to live in retirement.


How long they both will live and need income.

Many of us are worried about our financial goals,
Dave and Lynn included.

of people worry that their retirement savings may not be enough to live on.1

Potentially running out of money in retirement is a concern for Dave and Lynn. One way they can reduce the risk of running out of money is by increasing their protected lifetime income.*

A financial tool to help bridge the gap between what they have and what they’ll need in retirement may help.



1. Alliance for Lifetime Income, 2020 Protected Lifetime Income Study and Segmentation Report, October 26, 2020.

An annuity may help bridge the gap.

Why an annuity?

An annuity would allow Dave and Lynn to invest their money for potential tax-deferred** growth, which they’ll then receive as income when they retire. The income is available to withdraw when they need it, which can help bridge the gap between what they have in savings and what they’ll need. It’s like wrapping their retirement in an insurance policy.

What is an annuity?

An annuity is a long-term, tax-deferred vehicle designed for retirement. Variable annuities involve investment risks and may lose value. Earnings are taxable as ordinary income when distributed and may be subject to a 10% additional tax if withdrawn prior to age 59½.

Dave and Lynn chose a variable annuity.


Types of annuities

Fixed annuity

Avoids market volatility while also offering the benefits of guaranteed growth.

Dave and Lynn chose a variable annuity with an add-on living benefit.

What’s an add-on living benefit?

If Dave and Lynn want the investment potential of a variable annuity and also want the protection of guaranteed income, they can purchase an add-on living benefit with their variable annuity.

This can provide a guaranteed amount of income each month for a set period, or for life—even if the amount paid out is greater than the value of their contract.

How can a variable annuity work for them?

Dave and Lynn have a portfolio totaling $1 million, and prior to purchasing a variable annuity with an add-on living benefit, Social Security was their only source of retirement income.

By allocating 30% of their $1 million portfolio to their annuity and electing their add-on living benefit, more of Dave and Lynn’s expenses are covered by stable, protected income that will last the rest of their lives.

Let’s see how

$1 million portfolio

allocated to an annuity

Let’s crunch some numbers.

By purchasing a variable annuity with an add-on living benefit, Dave and Lynn can have an additional source of guaranteed income. In their case, this income will fund approximately 20% more of their total expenses.

When comparing their retirement with and without an annuity, the numbers speak for themselves.

Total Expenses $5,655,366
Guaranteed Income $2,238,419
Unfunded Expenses $3,416,947
Guaranteed Funding 40%


Dave and Lynn’s guaranteed inflows during retirement are projected to be $2,238,419 from their combined Social Security income, funding 40% of their total retirement expenses.

What’s the bottom line?

Breakdown from guaranteed annual income inflows starting in 2027:
Dave’s Social Security: $34,237
Lynn’s Social Security: $19,165
Guaranteed Withdrawals from their annuity: $18,565

Dave and Lynn, both age 58 in 2020, had $1 million in investible assets allocated to 38% stocks, 57% fixed income, 5% cash (historical rate of return of 5.4%). They purchased an annuity with $300,000 and allocated that to 80% stocks, 20% bonds (historical rate of return 8.63%). The annuity cost 1% more than their other investments–which were assumed to have no cost for the purpose of this analysis. Dave and Lynn also elected a living benefit that guarantees growth of the guaranteed withdrawal balance (GWB) income base at 5% while they wait to retire. Upon retirement, the living benefit provides a 4% guaranteed annual withdrawal amount. They plan to retire at 65, spend $70,000 per year in today’s dollars and enjoy a 29-year retirement. Like many financial plans, Dave and Lynn’s plan applies appropriate tax rules every year based on their tax exposure for that year, including receipt of dividends and withdrawals from qualified accounts to satisfy required minimum distributions (RMDs).

Source: eMoney, “Dave and Lynn Acosta, Acosta’s Financial Plan,” April 14, 2020.

A variable annuity with an add-on living benefit may provide more in retirement.

As we can see, Social Security alone may not be enough income to bridge the gap between what Dave and Lynn have and what they need in retirement. The addition of an annuity may provide an extra 20% of income, helping them fund more than half of their expenses.

And more income may mean having a better shot at the retirement they’ve worked so hard to enjoy. Without an annuity, they may need to withdraw more money from their portfolio to cover their retirement needs.

What’s next?



Social Security

Protected income without annuity

Social Security


Protected income with annuity

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Dave and Lynn's case study is a hypothetical example for illustrative purposes only and is not representative of the past or future performance of any product. Past performance is no guarantee of future results.

Annuities are long-term, tax-deferred vehicles designed for retirement and are insurance contracts. Variable and registered index-linked annuities involve investment risks, value fluctuation, and possible loss of principal. Earnings are taxable as ordinary income when distributed. Individuals may be subject to a 10% additional tax for withdrawals before age 59½ unless an exception to the tax is met.

Add-on living benefits are available for an extra charge in addition to the ongoing fees and expenses of the variable annuity and may be subject to conditions and limitations. There is no guarantee that a variable annuity with an add-on living benefit will provide sufficient retirement income.

*The principal value of the variable annuity will fluctuate based on the performance of the underlying investment options and may lose value.

**Tax deferral offers no additional value if an annuity is used to fund a qualified plan, such a 401(k) or IRA, and may be found at a lower close in other investment products. It also may not be available if the annuity is owned by a legal entity such as a corporation or certain types of trusts.

Before investing, investors should carefully consider the investment objectives, risks, charges, and expenses of the variable annuity and its underlying investment options. The current contract prospectus and underlying fund prospectuses provide this and other important information. Please contact your financial professional or the Company to obtain the prospectuses. Please read the prospectuses carefully before investing or sending money.

Jackson, its distributors, and their respective representatives do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used and cannot be used for the purpose of avoiding U.S. federal, state, or local tax penalties. Tax laws are complicated and subject to change. Tax results may depend on each taxpayer’s individual set of facts and circumstances. You should rely on your own independent advisors as to any tax, accounting, or legal statements made herein.

Guarantees are backed by the claims-paying ability of Jackson National Life Insurance Company or Jackson National Life Insurance Company of New York and do not apply to the principal amount or investment performance of a variable annuity’s separate account or its underlying investments. They are not backed by the broker/dealer from which this annuity contract is purchased, by the insurance agency from which this annuity contract is purchased or any affiliates of those entities, and none makes any representations or guarantees regarding the claims-paying ability of Jackson National Life Insurance Company or Jackson National Life Insurance Company of New York.

The latest maturity date or income date allowed under an annuity contract is age 95, which is the required age to annuitize or take a lump sum. Please see the prospectus for important information regarding the annuitization of a variable annuity contract.

Annuities are issued by Jackson National Life Insurance Company (Home Office: Lansing, Michigan) and in New York, annuities are issued by Jackson National Life Insurance Company of New York (Home Office: Purchase, New York). Variable products are distributed by Jackson National Life Distributors LLC. May not be available in all states and state variations may apply. These products have limitations and restrictions. Please contact the Company for more information.

Jackson® is the marketing name for Jackson Financial Inc., Jackson National Life Insurance Company®, and Jackson National Life Insurance Company of New York®.