Income Strategy Comparison
An interactive look at how guaranteed income and a managed portfolio work together to produce retirement income.
Guaranteed Income
$0
Guaranteed for life
Portfolio Income
$0
From withdrawals
Total Annual Income
$0
Year 1 starting income
Allocation at a Glance
How the premium splits between guaranteed annuity income and a managed investment portfolio.
Bonused Income Base
$1,200,000
$1.0M premium plus 20% bonus
LTC Doubled Income
$169,200
2x guaranteed income for 5 years if LTC qualifying
Portfolio Sustainability
28 years
Depletes around age 99
Annual Income Sources Over Time
Guaranteed income forms the foundation, paid for life. Portfolio withdrawals stack on top until the balance is exhausted. The top of the shaded area is the household's total annual income.
Side-by-Side
Five Allocation Scenarios
Year 1 income at the rates currently selected. Edit any allocation below to compare specific mixes.
Allocations to Compare
edit any value to customize
Scenario 1
$
Scenario 2
$
Scenario 3
$
Scenario 4
$
Scenario 5
$
| Allocation | Bonused Value | Guaranteed Income | Portfolio | Portfolio Income | Total Annual | LTC Doubled | Total w/ LTC |
|---|
LTC RiderIf a qualifying long-term care need is met, the guaranteed income payment doubles for up to 5 years. The two highlighted columns show the enhanced payment and the total annual income during that benefit window. Payment returns to the base level afterward. Rider availability and trigger conditions vary by carrier.
Tax Treatment
How Taxes Apply to Guaranteed Income
Tax treatment depends on the funding source. Toggle the controls to see how after-tax income changes across the projection.
Funding Source
Marginal Federal Tax Rate
Tax-Free Years
11.8
Through age 82 (basis recovery)
Lifetime Federal Tax
$0
Over 30-year projection at 22%
Net Lifetime Income
$0
Cumulative after federal tax
MethodologyFor non-qualified contracts this illustration assumes the original premium (basis) is recovered first, with subsequent income fully taxable as ordinary income. Actual treatment under IRC §72 may differ in timing. State income tax not included. Required minimum distributions are not modeled for qualified accounts. Long-term care payments under a tax-qualified rider may be excluded from income under IRC §7702B. Consult a tax advisor for personalized planning.
LTC Doubler
How the LTC Benefit Works
A built-in income enhancement that doubles guaranteed income during qualifying long-term care needs.
Qualifying Trigger
2 of 6 Activities of Daily Living
The doubler activates when the contract holder, certified by a licensed health care practitioner, is unable to perform without substantial assistance any 2 of the following 6 activities:
1Bathing
2Dressing
3Eating
4Toileting
5Transferring
6Continence
Severe cognitive impairment may also qualify under most contract terms.
How It Pays
Doubled Income for Up to 5 Years
Once triggered and certified, the guaranteed income payment is doubled for the benefit period. After 5 years (or when contract value depletes), payments revert to the base lifetime amount.
During Benefit Period
$169,200/yr
Up to 5 years while contract value remains
After Benefit Period
$84,600/yr
Reverts to base lifetime income, paid by carrier
Benefit Timeline
If the LTC trigger is met at year 1, here is how income flows over the contract life. Phase widths reflect approximate duration.
Important FramingThis is an income enhancement, not traditional long-term care insurance. The doubler operates only while contract value remains, and this contract is structured to deplete cash value around years 11–12 with the doubler triggered. After cash value depletes, base lifetime income continues from the carrier, but the doubler enhancement is no longer available — meaning a future LTC event later in life would not produce additional benefit. This feature is best understood as an addition to, not a substitute for, a dedicated long-term care policy.
Cost of Delay
The Cost of Waiting
Compares acting now against waiting one or three years to start guaranteed income.
Act Now
$84,600/yr
Wait 1 Year
$87,984/yr
Wait 3 Years
$95,131/yr
Cumulative Income at Key Retirement Ages
Each milestone shows total guaranteed income received through that age. The act-now cohort consistently leads — and the gap is most pronounced in the early retirement years when waiting cohorts have not yet started receiving income.
MethodologyDuring the wait period, premium remains in cash and grows at the portfolio growth rate — no income is taken. At issuance, the bonus is applied to the grown premium, and the payout rate is held constant. In practice many carriers offer higher payout rates at older issue ages and may credit a deferral roll-up on the income base, both of which would further offset the delay; this illustration omits those favorable effects to remain conservative. Foregone income represents guaranteed payments the act-now cohort receives during the wait period that the delayed cohort cannot recover.
Understanding the Trade-offs
Why It Matters
No allocation is universally right. The right answer depends on what the household values most.
Guaranteed Income
Guaranteed income is paid for life regardless of how markets behave. An annuity converts a lump sum into a contractual paycheck. Bonus credits typically apply to the income base, not to a withdrawable cash value.
Flexibility & Growth
A managed portfolio remains accessible for unexpected expenses, gifting, and opportunity. Returns are variable, and a withdrawal rate above the growth rate eventually depletes the balance. The trade is liquidity for certainty.
Legacy
Portfolio principal not consumed during life passes to heirs. The annuity death benefit typically declines as income is taken and may be exhausted before death depending on the contract. Riders can modify this.
Inflation
Guaranteed payments are level in nominal dollars unless a cost-of-living rider is purchased, which lowers the starting payment. The portfolio sleeve preserves the option to adjust withdrawals for inflation by allocating for growth above the draw rate.
LTC Doubler
Many contracts include a long-term care rider that doubles the guaranteed income payment for up to 5 years when a qualifying care need is met (typically the inability to perform 2 of 6 activities of daily living). The benefit returns to the base level afterward. Trigger conditions and benefit periods vary by carrier.
The Right Mix
A blended approach often serves best. Use guaranteed income to cover essential expenses (housing, healthcare, food) and the portfolio for discretionary spending and reserves. The right ratio depends on essential needs, longevity expectations, and legacy intent.