One of the most common questions I get from people approaching retirement is this:
“How much of my portfolio should actually go into annuities?”
And it’s a great question.
If you’re researching retirement income, you’ve probably heard everything from “never buy an annuity” to “put everything into one.” The reality is somewhere in the middle — and the right answer depends on your income goals, risk tolerance, and how you want to live in retirement.
I sell annuities, and I work with over 70 insurance carriers and thousands of options, so I see the entire landscape of what’s available. My goal isn’t to push one product — it’s to help you structure your portfolio so you can maximize income while still keeping flexibility and growth.
Let’s walk through what most retirees should know.
Need help choosing the best annuity for your unique situation? Have questions about getting an annuity? If so, it’s best to speak with an annuity specialist. Watch this short video to see how I can help you do this (at no cost to you!)
Tip: See how much an annuity could pay you using my annuity calculator
The Typical Rule: 30% to 50% in Annuities
Many financial advisors will tell you a simple guideline:
30% to 50% of your portfolio in annuities.
This range often works well because it balances three key goals:
- Guaranteed lifetime income
- Market growth potential
- Liquidity and flexibility
For example, let’s say you have $2.4 million saved.
A common structure might look like this:
- $800,000 in annuities (about 30%)
- $800,000 invested in the stock market
- $800,000 in cash or conservative assets
This approach gives you:
- Lifetime guaranteed income
- Market growth potential
- A safety buffer for emergencies
In other words, you’re not relying entirely on the market, and you’re not locking everything into contracts either.
💡 Pro Tip: The goal isn’t maximizing annuities — it’s maximizing retirement income stability.
👉 Want help comparing the best annuity options for your situation? Schedule a call with me and I’ll show you what’s available.
When 60% or More Makes Sense
Sometimes retirees want more guaranteed income and less market exposure.
That’s very common once people reach retirement.
For example, if someone allocates 60% of their portfolio into annuities, they can significantly increase their guaranteed income.
Imagine:
- Portfolio: $2.4 million
- $1.6 million into annuities
- $600,000 in stocks
- $200,000 in cash
Now you still have:
- Growth potential in the market
- Emergency reserves
- Much higher guaranteed retirement income
Many of my clients prefer this approach because at some point you’re no longer focused on accumulation — you’re focused on income.
You worked decades building wealth.
Now it’s time to enjoy the income it produces.
The Maximum Most Carriers Allow
Another thing people don’t realize is that insurance companies often limit how much you can put into annuities.
Typically, the maximum allowed is around 70% to 80% of your portfolio.
This depends on:
- Your income-to-expense ratio
- Liquidity levels
- Overall financial suitability
Even if someone wants to put 100% into annuities, the carriers won’t allow that.
They want to ensure you still have:
- Accessible cash
- Emergency funds
- Some diversification
That’s why most retirees end up somewhere between 30% and 70%.
👉 Curious what percentage would work best for your retirement plan? Schedule a call with me and I’ll run the numbers with you.
Using Annuities to Solve Longevity Risk
One of the biggest problems retirees face today is longevity risk.
That simply means:
Running out of money before you run out of life.
Annuities solve this problem because they provide:
- Guaranteed lifetime income
- Payments that never stop
- Protection against market crashes
For example, one scenario I showed recently involved:
- Age 60 retiree
- $800,000 annuity investment
- Income starting at age 62
That generated around $69,000 per year for life.
Even if the account value eventually declines due to withdrawals or fees, the income never stops.
That’s the entire purpose of these contracts.
You’re transferring longevity risk from yourself to the insurance company.
Why I Tell Clients to Use the Least Amount Necessary
Even though annuities are powerful tools, I always tell people the same thing:
Use the least amount necessary to create the income you need.
Why?
Because you still want:
- Growth potential
- Liquidity
- Flexibility
Some people want to maximize income and spend their money during retirement.
Others want to preserve assets for heirs.
There’s no universal answer.
But in most cases the sweet spot is:
30% to 60% of your retirement portfolio.
From there we adjust depending on your goals.
👉 If you’d like help finding the best annuity strategy for your retirement, click here to schedule a call with me.
Conclusion
So how much of your portfolio should go into annuities?
Here’s the reality:
- 30–50% is the most common range
- 60% or more works for income-focused retirees
- 70–80% is typically the maximum allowed by carriers
The right answer depends on your:
- Retirement income needs
- Risk tolerance
- Growth expectations
- Longevity concerns
My job is to help you compare the best annuity options across dozens of carriers so you can build a retirement income plan that actually works.
Need help with finding the best annuity for your retirement?
Click here to schedule a call with me.
On the call, I can help you:
- Determine what type of annuity is best for you
- Find the highest paying annuities for your unique situation
- Answer any other questions you may have