In retirement planning, few concerns are as universal as the question: “Will I have enough reliable income to maintain my lifestyle?” At Fortis Financial Group, we understand that establishing dependable income streams is essential for financial security and peace of mind during your retirement years.
The Retirement Income Challenge
Today’s retirees face unique challenges. With traditional pension plans becoming increasingly rare, longer life expectancies, and economic uncertainties, creating stable income streams requires careful planning and strategic implementation.
According to recent CDC data, a 65-year-old woman can expect to live an additional 20.8 years on average, while a 65-year-old man can expect to live an additional 18.2 years. This means retirement savings may need to last 20-30 years or more. Research also shows many retirees underestimate their longevity, significantly increasing the risk of outliving their resources.
Let’s explore the most effective strategies for creating guaranteed income streams that can provide financial security throughout your retirement years.
Social Security Optimization: Timing Matters
Social Security remains the foundation of retirement income for many Americans, with the average monthly benefit for retired workers in 2025 projected to be approximately $1,976. However, maximizing these benefits requires careful consideration of when to begin claiming.
Key considerations for Social Security optimization:
- Delayed claiming: For each year you delay claiming beyond full retirement age (up to age 70), your benefit increases by approximately 8%
- Spousal coordination: Married couples can implement strategies that maximize lifetime benefits across both spouses
- Tax efficiency: Understanding how Social Security benefits are taxed can help you retain more of your benefits
For those born in 1960 or later with a full retirement age of 67, the difference between claiming at age 62 versus age 70 represents approximately a 54% increase in monthly benefits, making this decision one of the most impactful in your retirement income planning.
Annuities: Insurance Against Longevity Risk
Annuities can serve as a valuable tool for creating guaranteed income that cannot be outlived. While sometimes complex, certain annuity products offer compelling benefits for retirement income planning.
Types of annuities to consider:
- Single Premium Immediate Annuities (SPIAs): Convert a lump sum into an immediate income stream for life
- Deferred Income Annuities (DIAs): Purchase today for income that begins at a future date
- Qualified Longevity Annuity Contracts (QLACs): Special deferred annuities that can be purchased within retirement accounts
When properly utilized, annuities can provide longevity insurance and peace of mind. Based on current market rates, a 65-year-old investing $100,000 in an immediate annuity might receive approximately $7,590 annually for life ($632.50 monthly), with rates varying based on gender, interest rates, and other factors.
Bond Ladders: Creating Your Own Pension
A bond ladder strategy involves purchasing individual bonds with staggered maturity dates, creating predictable income streams while managing interest rate risk.
Benefits of bond ladders:
- Predictable income: Bond interest payments provide regular cash flow
- Principal protection: Assuming no defaults, principal is returned at maturity
- Interest rate risk management: Staggered maturities reduce the impact of interest rate fluctuations
A properly constructed bond ladder can provide reliable income for a specific period (such as the first 10-15 years of retirement) or throughout your retirement, depending on your goals and resources. Retirees can even structure ladders to provide monthly income by spreading out maturity dates strategically.
Dividend Growth Investing: Income Plus Growth
Quality dividend-paying stocks can provide both current income and growth potential to help combat inflation over time.
Advantages of dividend investing:
- Growing income: Many quality companies increase their dividends annually
- Inflation protection: Dividend growth can help maintain purchasing power
- Potential for capital appreciation: Stock values may increase over time
A diversified portfolio of established dividend-paying companies has historically provided inflation-beating income growth. Financial advisors typically recommend allocating about 30-50% of a retirement portfolio to dividend-paying investments, depending on your risk tolerance and income needs.
Creating an Integrated Retirement Income Plan
The most effective retirement income strategies typically involve a combination of these approaches, creating layers of income to address different needs and risks:
- Foundation layer: Social Security and possibly pensions for basic needs
- Guaranteed layer: Annuities or bond ladders for essential expenses
- Growth layer: Dividend stocks and other investments for discretionary spending and inflation protection
This layered approach can provide both security and flexibility, allowing you to adapt to changing circumstances while maintaining confidence in your financial future.
Next Steps: Personalized Retirement Income Planning
Creating an optimal retirement income strategy requires personalized planning based on your unique circumstances, goals, and resources. At Fortis Financial Group, we specialize in helping retirees and pre-retirees develop comprehensive income plans that address their specific needs.
Whether you’re concerned about outliving your savings, maintaining your lifestyle during retirement, or leaving a legacy for your loved ones, our experienced advisors can help you navigate these important decisions.
Contact us today to schedule a consultation and take the first step toward creating guaranteed income streams for a secure and fulfilling retirement.
Fortis Financial Group is a fiduciary wealth management firm based in Bellevue, WA, specializing in comprehensive retirement planning and investment management. We focus on helping our clients reduce stress by knowing when they can securely retire, stop overpaying taxes, and reduce the anxiety of financially navigating life transitions.
Endnotes
- “NCHS Fact Sheet,” National Center for Health Statistics, March 2021. https://www.cdc.gov/nchs/data/factsheets/factsheet_nvss.pdf
- “Social Security benefits in 2025: 5 big changes retirees should plan for,” Bankrate, October 24, 2024. https://www.bankrate.com/retirement/social-security-benefits-changes-in-2025/
- “Delayed Retirement Credits,” AARP, October 10, 2018. https://www.aarp.org/retirement/social-security/questions-answers/delayed-retirement-credits.html
- “Immediate Annuity Income Calculator (2025 Rates),” Seniors Mutual, December 14, 2024. https://seniorsmutual.com/immediate-annuity-income-calculato/
