Guaranteed Income

FIA with Income Rider

Growth potential while you're working. A guaranteed paycheck for life once you retire.

7 min read · By Brandon Rickrode, Licensed Retirement Specialist

Two products in one

A fixed-indexed annuity with an income rider combines two things:

The FIA base

Index-linked growth with a floor against losses. Your money grows (or holds steady) based on market index performance.

The income rider

An optional add-on that guarantees you a specific income amount for life — regardless of what the market does or how long you live.

How the income rider works

When you add an income rider, the insurance company creates a separate "income account value" — sometimes called a benefit base. This account grows at a guaranteed rate (often 6–8% per year) during the accumulation phase, regardless of market performance.

When you're ready to turn on income, the carrier calculates your guaranteed annual payment based on your income account value and your age. Once you start, that payment continues for the rest of your life — even if your actual account value runs to zero.

Simple example

Initial deposit$200,000

Income account grows at 7%/yr for 10 years$393,430

Income payout rate at age 655.5%

Annual guaranteed income$21,639/yr

Monthly guaranteed income$1,803/mo

Hypothetical example only. Actual rates and payouts vary by carrier, age, and product.

The two "buckets" to understand

One thing that confuses people: there are two separate values in this product.

Accumulation value: The actual money in your account. This grows based on index performance and can be accessed (subject to surrender charges) or passed to heirs.

Income account value (benefit base): A separate, higher number used only to calculate your income payments. You can't withdraw this as a lump sum — it's the measuring stick for your guaranteed income.

What to watch for

Rider fees: Income riders typically cost 0.75%–1.25% per year, deducted from your accumulation value. This is the cost of the income guarantee — worth it for many people, but important to understand.

Waiting period: Most income riders require you to wait at least 1–2 years before turning on income. Many people buy these 5–10 years before retirement to let the income account grow.

Spousal options: Many riders offer a joint-life option so income continues for a surviving spouse. This typically reduces the payout amount slightly.

Who is this right for?

People 5–15 years from retirement who want to lock in a future income stream now
Those who want market-linked growth potential but also need income certainty
Anyone worried about outliving their savings
People who don't have a pension and want to create their own "paycheck" in retirement

Want to run the numbers for your situation?

I can show you exactly what a guaranteed income stream would look like based on your age, timeline, and deposit amount.

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