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Annuities Emerge as Lifeline for Retirees as Pensions Vanish
27 Aug
Summary
- Social Security alone won't cover retirement expenses
- Pensions are disappearing, leaving workers to manage own savings
- Annuities can provide guaranteed lifetime income for retirees
As of August 2025, the retirement landscape has undergone a significant shift. Social Security benefits, which averaged around $2,000 per month as of July 2025, are no longer sufficient to cover the full range of expenses for most retirees. Additionally, the prevalence of pensions has been steadily declining, with only 15% of private industry workers having access to a pension plan in 2023.
This changing landscape has left individuals responsible for piecing together their own retirement income streams. Annuities have emerged as a crucial tool, as they are the only product that can provide a guaranteed lifetime income. However, other financial instruments, such as bonds, dividend-paying stocks, and real estate, can also play a role in creating a balanced and flexible retirement portfolio.
There is no one-size-fits-all approach to generating lifetime income in retirement. The right strategy depends on an individual's risk tolerance, resources, and retirement goals. By combining various income sources, retirees can strive to achieve the financial security they need to enjoy their golden years.
