"What if my money runs out before I do?"

It's one of the most common questions we hear at True North Advisors. And it's exactly the right question to be asking as you get closer to retirement.

The short answer is: an annuity might help, or it might not be the right fit for you. Whether an annuity belongs in your retirement plan depends entirely on your situation, your goals, and what financial security actually looks like for you.

Here's how we think about it:

What an annuity actually is

In simple terms an annuity is a contract between you and an insurance company. You contribute a lump sum or a series of payments, and in return, the insurer agrees to pay you a predictable stream of income. This can start right away, or at a future date you choose.

Think of it as building your own personal pension. In a world where fewer employers offer defined benefit plans, and Social Security alone rarely covers everything, an annuity gives you a way to create guaranteed income that doesn't stop no matter how long you live or what the market does.

There are several types, each with different features and trade-offs:

• Fixed annuities offer a guaranteed interest rate and predictable, stable income. These are straightforward and easy to plan around.
• Variable annuities tie your growth potential to market performance, which means more upside but also more risk.
• Fixed indexed annuities link your returns to a market index (like the S&P 500) while protecting against losses. This is a middle ground that many clients find appealing.

Each type serves a different purpose. The right choice depends on your timeline, your risk tolerance, and what role you want the annuity to play in your overall plan. That's why we never recommend a product before we understand your full financial picture.

Who tends to benefit most

Not everyone needs an annuity. But for certain people approaching or entering retirement, it can be a genuinely valuable piece of the strategy.

Over the years, we've found that annuities tend to make the most sense when:

• You're nearing retirement and have a gap between what Social Security or other sources will provide and what you actually need to cover your essential monthly expenses.
• Market volatility has been keeping you up at night. If a bad year in the market would cause you real stress — or push you toward financial decisions you'd later regret — having a portion of your income guaranteed can make a significant difference.
• You've already maxed out your 401(k), IRA, and other tax-advantaged accounts and you're looking for additional ways to protect and grow your retirement savings.
• You're in good health and expect a long retirement. The longer you live, the more valuable guaranteed lifetime income becomes.
• You want simplicity. Rather than managing withdrawal rates and worrying about sequence-of-returns risk, some clients find genuine peace of mind in knowing a check arrives every month — no matter what.

These aren't hypothetical scenarios. They're real conversations we have regularly with people who are trying to make thoughtful, confident decisions about retirement.

When an annuity probably isn't the right fit

We believe in giving you the full picture. That means being just as clear about when an annuity isn't the right tool.

An annuity is likely not the right fit if:

• You anticipate needing access to those funds in the near term. Most annuities include surrender periods — typically five to ten years — during which early withdrawals may trigger penalties.
• Your guaranteed income from Social Security, a pension, or other sources already covers your essential living expenses. If your income needs are already met, adding another guaranteed income stream may not be the priority.
• You're still many years from retirement, with a long growth horizon ahead. For younger investors, there are often better tools for building wealth before shifting toward income protection.
• Flexibility is your top priority. If you want the ability to move your money freely and adjust your strategy without restriction, the structure of an annuity contract may feel limiting.

The point is never to fit your life around a financial product. It's to find the right product for the life you're actually living. Understanding what an annuity is just the beginning of deciding if it is the right choice for your retirement plan. You will want to consider fees, tax implications, and how it fits into the rest of your retirement plan.

You don't have to work through this alone. If you've been thinking about annuities (or simply wondering whether your retirement income plan is as solid as it could be) we'd welcome that conversation. We take the time to understand your full picture before making any recommendations. And if an annuity isn't the right fit for you, we'll tell you that. Our job is to help you move forward with clarity, not to steer you toward a product. 

That's what 25 years of putting clients first looks like.