Last updated: 26 May 24 22:13:25 (UTC)

What the Experts Say about Using Variable Annuities for a Guaranteed Income

Compiled by Michael Paulding Thomas


"When you’re approximately 10-years from retirement withdrawals start considering a variable annuity with.a guaranteed income rider. This will provide a minimum 5% guaranteed withdrawal for the rest of your life, while staying 100% invested in the world’s great companies.”Michael


"I know of only two ways of coping with equity volatility during retirement withdrawals:

  1. Abiding faith in the historical record, in the greatness of free-market democratic capitalism.

  2. The other method is what the variable annuity industry is pleased to call ‘living benefits’.”

Nick Murray, On Panic, Faith, and the Determined Primitive


"Insurance companies promise that annuitants won’t run out of income, ever! When there is a living benefit, an annuitant may run out of cash but not out of income.”Richard Hoe, ChFC, CLU, AEP. From the article “The Better IRA” in The Investment Edge magazine.




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Moshe Arye Milesky is a tenured professor at York University. He has a Ph.D. in Finance, a Master of Arts in Mathematics and cum laude from Yeshiva University. He is a lifetime Fellow of the Fields Institute for Research in Mathematical Sciences. Over the last 25 years he has published 15 books and 60 peer-reviewed scholarly articles on wealth and risk management. He currently serves as a member of the editorial boards for the Journal of Pension Economics and Finance (JPEF), and Insurance: Mathematics and Economics (IME).


“I purchased a variable annuity with a guaranteed living benefit and allocated 100% to stocks.Moshe Milevsky, End Notes from the book In Defense of Annuities (2021).


“… with a guaranteed and predictable lifetime of income that can’t be outlived.” -Moshe Milevsky, ―Moshe Milevsky, Section IV from the book In Defense of Annuities (2021).


“A living benefit is paid to the annuitant for as long as they live and ceases upon death.”Moshe Milevsky, Section V from the book In Defense of Annuities (2021).


“It protects against the risk of living beyond, even far beyond, life expectancy - without surrendering either upside potential of liquidity of the underlying portfolio.”Moshe Milevsky, Section V from the book In Defense of Annuities (2021).


“The income is guaranteed to never decline for the remaining life of the annuitant. If the underlying investment portfolio ever reaches zero, the guaranteed income will continue so long as the annuitant or, for a joint product, one member of the couple is still alive. Whatever remains in the account at the time of death goes to the heirs.Moshe Milevsky, Section V from the book In Defense of Annuities (2021).


“Fees and periodic withdrawals are deducted from the VA account as long as there are funds available. But if those periodic withdrawals every fully deplete this account, the insurance component is triggered to fulfill the remaining withdrawals for the lifetime of the investor.Moshe Milevsky, Section V from the book In Defense of Annuities (2021).


“… to provide an assortment of lifetime income guarantees meant to protect the policyholder against longevity risk as well as what the industry has coined as ‘sequence-of-returns risk’, which refers to the chance that a retirement portfolio, from which cash is being withdrawn, suffers early losses, magnified by the retiree living longer than average. All you need is a bear market at the wrong time, and the sustainability of your income can be cut dramatically.”Moshe Milevsky, Section V from the book In Defense of Annuities (2021).


“By promising a lifetime of retirement income, insurance companies are taking on the above-noted longevity risk.”Moshe Milevsky, Section V from the book In Defense of Annuities (2021).


“Invest aggressively, diversify, exposure to equities, and wrap some protection around it. Optimize your variable annuity by having an aggressive allocation and protecting it with a lifetime income.”Moshe Milevsky, from his Annuities for a Biological Age webinar (2020).




John Huggard, J.D., CFP, CLU, ChFC, is a sought after expert witness in securities cases and a nationally recognized speaker on the topic of variable annuities.


“Win-Win Situation:

  • If the market goes up - you’re a winner.
  • If the market goes down - you’re a winner.
  • No more disgruntled clients.

John Huggard, page 42 from his lecture notes, “Understanding the New Variable Annuity Living Benefit Riders” (January 8, 2007).


“Living Benefits are not new variable annuities, but riders available with existing variable annuities. Often, only a box on the application need be checked to obtain a specific living benefit. Living benefit riders provide long-term investors with:

  • An opportunity to obtain stock market gaines if the market goes up.
  • An opportunity to obtain an upward ratcheting lifetime stream of income regardless of the stock market’s future direction without annuitization.
  • The ability to avoid the ‘longevity problem’ for both spouses.
  • The ability to avoid the ‘sequence of return’ trap.
  • The advantages of obtaining basic variable annuity benefits (commission-free investing, no transaction costs, death benefit, etc.).”

John Huggard, Page 8 from his lecture notes, “Understanding the New Variable Annuity Living Benefit Riders” (January 8, 2007).




A brief compilation of excellent investment advice from the best of the best.

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