One of the biggest worries in retirement is running out of money. Social Security helps, and a pension helps more, but many people in Birmingham retire with savings they need to turn into a steady paycheck that lasts as long as they do.
A guaranteed lifetime income annuity is built for exactly that. You give an insurance company a sum of money, and it promises to pay you income for the rest of your life, no matter how long you live or what the markets do.
At Assurance Financial Solutions, we’re an independent insurance agency in Birmingham. Income payouts for the same deposit can differ meaningfully from one carrier to the next, so we compare options from multiple A-rated carriers side by side. For an overview of every annuity type, see our main annuities page.
Want to see your income options? Call Sam Price at (205) 578-2097 or request a free retirement income comparison.
What Is Guaranteed Lifetime Income?
Guaranteed lifetime income is a stream of payments, usually monthly, that an insurance company promises to pay for as long as you live. Think of it as creating your own pension from part of your savings.
Because the insurer pools many people together, those who live a long time are paid from the same pool as those who don’t. That pooling is what lets an annuity guarantee income for life, something a savings account or investment portfolio can’t do on its own.
Most people don’t put all their savings into lifetime income. A common approach is to cover essential expenses, such as housing, food, utilities and insurance, with guaranteed sources like Social Security and an annuity, then keep the rest invested and flexible.
Three Ways to Get Guaranteed Lifetime Income
There are three main ways to turn savings into lifetime income. The right one depends mostly on when you want the income to start and how much flexibility you want to keep.
| Immediate annuity (SPIA) | Deferred income annuity (DIA) | Fixed or indexed annuity with an income rider | |
|---|---|---|---|
| Income starts | Within about a year of purchase | On a future date you choose, often years away | When you choose to turn it on, after a waiting period |
| Best for | Retiring now and needing income right away | Planning ahead for income later, such as at 70 or 80 | Wanting future income while keeping access to an account value |
| Access to your money | Generally none after purchase | Generally none before income starts | Account value stays accessible, subject to surrender charges and rider rules |
| Income for each dollar | Set at purchase | Often higher per dollar, since you wait longer | Set by the rider’s formula; varies widely by carrier |
| Extra cost | None beyond the purchase | None beyond the purchase | Many riders charge an annual fee |
An immediate annuity, also called a single premium immediate annuity or SPIA, is the simplest: deposit a lump sum and start receiving income right away. A deferred income annuity works the same way but pushes the start date out, which usually means larger payments when they begin. An income rider is an add-on to a fixed or indexed annuity that guarantees a lifetime withdrawal amount while your account stays in place.
If you’re still a few years from retirement and want your money to grow first, see our guide to multi-year guaranteed annuities (MYGAs).
Choosing How Your Income Is Paid
When you set up lifetime income, you choose what happens if you die early. Options that protect your heirs generally mean somewhat smaller monthly payments.
- Life only. The highest income for one person, but payments stop at death, even if that’s soon after you start.
- Life with period certain. Payments last for life, and if you die within a set period, such as 10 or 20 years, your beneficiary receives the remaining payments.
- Joint life. Income continues as long as either you or your spouse is living. Many couples choose this so the surviving spouse isn’t left short.
- Cash or installment refund. If you die before receiving at least what you paid in, your beneficiary gets the difference, either as a lump sum or as continued payments.
We’ll show you the monthly income for each option side by side, so you can see exactly what each protection costs.
What Determines How Much Income You Get
Your income amount depends on several things:
- Your age when income starts. The older you are, the higher the payment, because the insurer expects to pay for fewer years.
- Interest rates. When rates are higher, insurers can generally offer more income for the same deposit.
- The payout option. Life only pays the most; joint life and refund options pay less.
- When income begins. Waiting longer, as with a deferred income annuity, usually increases the payment.
- The carrier. Each company prices income differently and updates its rates often.
That last point is why shopping matters. For the same person, deposit and payout option, monthly income quotes can differ noticeably from one A-rated carrier to the next. Because payouts change frequently, we don’t publish a payout table here; we’ll run current quotes for your exact situation.
The Trade-Offs to Understand
Lifetime income solves a real problem, but it isn’t right for every dollar. Be clear on these before you buy:
- You give up access. With an immediate or deferred income annuity, the money you deposit generally can’t be withdrawn as a lump sum later. Keep a separate emergency fund.
- Inflation. Most income payments are level, so their buying power shrinks over time. Some carriers offer payments that increase each year, in exchange for a lower starting amount.
- The decision is usually permanent. Once income starts, you typically can’t change the payout option or cancel the contract.
- Income riders have costs and rules. Rider fees reduce your account value, and taking more than the guaranteed amount can reduce or end the guarantee.
For many retirees, these trade-offs are worth it for the part of their savings meant to cover essentials. We’ll help you decide how much, if any, belongs in lifetime income.
How Annuity Income Is Taxed
How your income is taxed depends on the money you used to buy the annuity:
- Bought with after-tax savings. Part of each payment is treated as a tax-free return of what you paid in, and the rest is taxable as ordinary income. According to IRS Publication 575, the tax-free part is figured when your annuity starts and stays the same each year. Once you’ve recovered your full cost, payments are generally fully taxable.
- Bought with IRA or other pre-tax retirement money. Because you haven’t paid tax on that money yet, the payments are generally fully taxable as income.
Lifetime income can also be set up inside an IRA, which can help with required minimum distributions. We’re not tax advisors, so we’ll coordinate with your CPA when taxes are a big part of the decision.
How Safe Is Annuity Income?
A lifetime income guarantee is only as strong as the insurance company making it, and you may be relying on it for decades. That’s why we focus on carriers with strong financial strength ratings from agencies such as AM Best, and we show you each carrier’s rating next to its quote.
Annuities aren’t FDIC-insured, as the FDIC notes. Alabama residents do have a backstop through the Alabama Life & Disability Insurance Guaranty Association, which covers up to $250,000 in present value of annuity benefits if an insurer fails, with a $300,000 overall limit per person across life and annuity coverage (NOLHGA).
For larger amounts, some retirees split their income between two or more carriers so each contract stays within those limits.
How We Shop Lifetime Income for You
As an independent agency, we compare income options across multiple A-rated carriers instead of offering one company’s product. For your situation, we’ll show you:
- Monthly income from several carriers for the same deposit
- Each payout option side by side: life only, period certain, joint life and refund
- Immediate versus deferred start dates, and how much waiting adds
- Income rider options, including fees and withdrawal rules, if you want to keep an account value
- Each carrier’s financial strength rating
- How the income fits with your Social Security, pension and other savings
There’s no cost for the comparison, and no obligation to buy.
Frequently Asked Questions About Lifetime Income
Who can help me find guaranteed retirement income in Birmingham?
An independent agent who compares multiple carriers. Assurance Financial Solutions is an independent agency in Birmingham that shops immediate annuities, deferred income annuities and income riders from multiple A-rated carriers side by side. Call Sam Price at (205) 578-2097.
What’s the difference between an immediate and a deferred income annuity?
An immediate annuity starts paying within about a year of purchase. A deferred income annuity starts on a later date you choose, which usually means a larger payment when it begins.
How much income would I get from an annuity?
It depends on your age, the amount you deposit, the payout option you choose, current interest rates and the carrier. We’ll run current quotes for your exact situation so you can compare real numbers.
What happens to my annuity when I die?
It depends on the payout option. With life only, payments stop. With period certain, joint life or refund options, your spouse or beneficiaries can continue to receive payments or a refund.
Can I get my money back after I buy an income annuity?
With an immediate or deferred income annuity, generally not as a lump sum. If keeping access matters, an annuity with an income rider lets you keep an account value while guaranteeing future income.
Should I use part of my IRA for lifetime income?
Many people do. Buying lifetime income inside an IRA keeps the tax treatment of the IRA, and some products are designed to work with required minimum distributions. We’ll coordinate with your CPA.
Does it cost anything to compare income options with you?
No. A comparison is free and there’s no obligation.
Plan Your Retirement Income with Sam Price in Birmingham
Whether you’re retiring this year or planning a decade ahead, we’ll compare guaranteed lifetime income options across multiple carriers and show you how they fit with Social Security and the rest of your savings. There’s no cost and no obligation.
- Call: (205) 578-2097
- Email: sam@afslife.com
- Meet: By appointment only, in person in Birmingham or virtually
Request a free quote, compare MYGAs, or explore all of our annuity options.
Assurance Financial Solutions is an independent insurance agency. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Payouts, terms, rider fees and availability vary by carrier and state and are subject to change. This page is general information, not tax or investment advice.
Reviewed by Sam Price, independent insurance agent, Assurance Financial Solutions (Alabama License #653491, NPN 16846840). Last updated October 2026.