High net worth retirees are starting to rethink the traditional portfolio.
For decades, the standard retirement advice was simple: build a stock and bond portfolio, withdraw from it carefully, and hope the market cooperates.
But for many wealthy retirees, that strategy no longer feels comfortable.
When you’ve spent decades building $3 million, $5 million, $10 million, or more, the question changes.
It’s no longer just, “How do I grow this money?”
It becomes, “How do I protect my lifestyle, create reliable income, and still allow the rest of my money to grow?”
That is why many high net worth retirees are shifting away from relying only on traditional portfolios and looking at annuities as part of their retirement income strategy.
Not because they want to give up growth.
But because they want guaranteed income, less emotional stress, and more freedom with the rest of their investments.
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 Problem With Traditional Portfolios in Retirement
A traditional portfolio usually tries to do everything at once.
It is supposed to provide growth.
It is supposed to generate income.
It is supposed to protect against downturns.
And it is supposed to help you avoid running out of money.
That sounds good on paper.
But in real retirement, it can get complicated.
When markets are up, everything feels fine. But when markets drop, retirees often face a difficult decision.
Do you keep withdrawing from a falling portfolio?
Do you reduce your lifestyle?
Do you move more money into “safer” investments?
Do you take less risk and accept lower growth?
This is especially stressful for high net worth retirees because the dollar amounts are much larger.
A 15% loss on a $500,000 portfolio is painful.
A 15% loss on a $5 million portfolio is $750,000.
That can change how people feel about risk very quickly.
💡 Pro Tip: The larger your portfolio gets, the more important it becomes to separate your income strategy from your growth strategy.
👉 Want help comparing annuity options for part of your retirement portfolio? Click here to schedule a call with me.
Why Wealthy Retirees Don’t Always Want More Market Risk
Many wealthy retirees I speak with are not looking for the highest possible return on every dollar.
They are looking for certainty.
They may already have enough money. What they don’t want is to expose the income portion of their retirement to unnecessary risk.
That is one of the biggest reasons high net worth retirees are using annuity contracts.
They are not always putting all their money into an annuity.
In many cases, they are taking a portion of their portfolio and turning that portion into guaranteed lifetime income.
For example, someone with a $4.5 million portfolio may decide to take $1.5 million and use it to create a predictable income stream.
That still leaves $3 million invested for growth.
But now, their basic income needs are covered.
That changes everything.
They no longer have to depend entirely on selling investments every month, quarter, or year to support their lifestyle.
The Shift Away From Bonds
For years, retirees were told to use bonds for stability.
That is where the traditional 60/40 portfolio came from.
The idea was simple: stocks provide growth, bonds provide stability.
But many retirees have noticed that bonds do not always behave the way they expected.
Interest rate risk can hurt bond values.
And there have been periods where both stocks and bonds struggled at the same time.
That has caused some high net worth retirees to ask a different question:
“What if I used an annuity as part of my bond allocation?”
That does not mean annuities and bonds are the same thing.
They are not.
But for retirees who want stability, income, and less direct market exposure, certain annuities can play a similar role in the retirement income plan.
A MYGA, or Multi-Year Guaranteed Annuity, can offer a fixed rate for a set number of years.
An income annuity with a rider can provide guaranteed income for life.
The key is knowing what job you want your money to do.
If you want highest growth ONLY, an annuity may not be the right tool.
If you want guaranteed income, it may be worth comparing.
👉 Want help seeing whether an annuity could replace part of your bond allocation? Click here to schedule a call.
Why Guaranteed Income Changes the Way Retirees Invest
One of the biggest benefits of guaranteed income is not just financial.
It is emotional.
When retirees know they have income coming in every month, they may feel more comfortable leaving the rest of their portfolio invested for growth.
That can reduce the temptation to sell during downturns.
It can also help retirees avoid becoming overly conservative with their entire portfolio.
For example, let’s say a couple has $4.5 million.
They put $1.5 million into an annuity designed for guaranteed lifetime income.
Now they still have $3 million available for market growth.
If the annuity income, plus Social Security or other income sources, covers their lifestyle, they may be able to invest the remaining $3 million more aggressively.
That is the strategy many wealthy retirees are using.
They are not using the entire portfolio for income.
They are using a portion for income, then allowing the rest to grow.
That can create the “best of both worlds” approach:
- Guaranteed income for lifestyle needs
- Growth potential with remaining assets
- Less pressure to sell during market downturns
- More confidence in retirement spending
- Better emotional control during volatility
💡 Pro Tip: The goal is not to avoid all risk. The goal is to avoid needing to sell risky assets at the wrong time.
Annuities Are Not Designed to Replace Every Investment
This is where people often get confused.
Annuities are not meant to make you rich.
They are not designed to replace stocks.
…and they are not supposed to be your entire financial plan.
In my opinion, annuities are best used for a specific purpose: income.
That is it.
If you buy an annuity for guaranteed income, you are buying a pension-like stream of payments.
You are using part of your retirement savings to create predictable cash flow.
That cash flow can help cover your lifestyle, your spouse, and your long-term retirement needs.
Then the rest of your money can remain invested.
…and this is why many wealthy retirees are not asking, “Should I choose stocks or annuities?”
They are asking, “How much of my portfolio should create guaranteed income, and how much should stay invested for growth?”
That is a much better question.
Why Some Advisors Resist This Strategy
Many financial advisors are paid based on assets under management.
That means if all your money stays in the managed portfolio, they may continue collecting fees on the full amount.
So when a retiree moves part of that money into an annuity, many advisors do not like it.
That does not automatically mean the annuity is wrong.
It also does not automatically mean the advisor is wrong.
But it does mean you should understand the incentives behind the advice you are receiving.
A good retirement income plan should be built around what is best for you.
Not what generates the most fees.
Not what pays the highest commission.
Not what sounds the most complicated.
You need to see the numbers clearly.
You need to compare options.
And you need to understand what each product is designed to do.
That is why transparency matters so much.
When I help people compare annuity options, I want them to see what is actually available. Not just one or two products. Not just the ones that benefit the agent most.
The goal is to find the right fit for your income, your spouse, your risk tolerance, and your retirement goals.
👉 Want to compare the best annuity options available for your situation? Click here to schedule a call with me.
Conclusion
Traditional portfolios can still play an important role in retirement.
Stocks can provide long-term growth.
Bonds may still have a place.
Cash can provide liquidity.
But for many high net worth retirees, that is not enough.
They want a clear income plan.
They want protection from emotional decision-making.
They want to know that no matter what the market does, they have income coming in.
That is why many wealthy retirees are shifting toward a strategy that combines guaranteed income with long-term growth.
A properly selected annuity can help provide that income foundation.
The key is comparing your options carefully and understanding exactly what you are buying.
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