What if you could potentially increase your retirement income by 23% — without taking on more market risk?

That's not wishful thinking. According to the 2025 Goldman Sachs Asset Management Retirement Survey & Insights Report, blending annuities into a retirement plan could significantly increase the income you can safely spend each year.¹ And in today's uncertain economy — with inflation, market volatility, and rising living costs — that's an opportunity worth understanding.

I'm Eric Judy, a Retirement Income Certified Professional, Investment Advisor Representative, and co-founder of the Annuity Guys. Today, I want to walk you through what Goldman Sachs calls the hybrid income strategy — how combining traditional investments with guaranteed income from annuities could give retirees greater confidence and stability in their retirement years.

My goal is simple: to help you make smarter, more informed decisions about your retirement income. No hype. No pressure.

The "Financial Vortex" Facing Retirees

Goldman Sachs describes what they call a Financial Vortex — a cycle of competing financial priorities and life events that make it increasingly difficult for people to save for long-term goals like retirement.¹ Rising health care costs, housing expenses, caregiving responsibilities, and the ever-present worry of inflation and market uncertainty are putting pressure on retirement budgets from every direction.

It's no wonder so many Americans — especially those 55 and older — feel stretched thin. Even higher-income households aren't immune. According to the Goldman Sachs survey, 42% of younger working respondents (Gen Z, Millennials, and Gen X) reported living paycheck to paycheck, and nearly three-quarters (74%) said they struggle to save for retirement due to competing financial priorities.¹ And once you hit retirement, the challenge shifts from saving enough to making it last.

That's exactly where a guaranteed income component, like an annuity, can help bring some calm to the chaos.

How Goldman Sachs Arrived at That 23% Increase

Here's how the model works. Goldman Sachs studied a retirement portfolio where roughly 30% was allocated to a single premium immediate annuity (SPIA) with a 7.1% annual payout, while the remaining 70% stayed invested in traditional assets following the standard 4% withdrawal rule. The blended withdrawal rate came out to 4.93% — a 23% increase over the traditional approach alone.²

The annuity portion provides steady, predictable income — like a personal pension. The investment side offers growth and flexibility. Together, they create a balance that allows retirees to safely draw more income overall without increased risk exposure.

To put real numbers on it: under the traditional 4% rule, a $1 million portfolio generates about $40,000 per year. But with the blended approach, that same $1 million could generate roughly $49,300 annually.²

Think of it as building a sturdy bridge. One side is anchored in security, the other in growth potential. The result? A smoother, more sustainable ride through retirement.

Why This Approach Makes Sense Right Now

There are a few key reasons this hybrid strategy deserves your attention:

Market volatility protection. When markets dip, your annuity income stays steady. You're not forced to sell investments at a loss just to pay the bills.

Longevity risk management. Annuities can pay you for life, helping protect against outliving your savings — one of the biggest fears retirees face. In fact, 58% of workers surveyed by Goldman Sachs said they believe they may outlive their retirement savings.¹

Psychological peace. Many retirees find it easier to actually enjoy their money when they know part of their income is guaranteed, no matter what happens on Wall Street.

Inflation flexibility. The remaining portfolio can be adjusted for inflation or growth, giving you more control and adaptability over time.

This isn't about replacing your investments. It's about strengthening them.

A Real-World Example

Let's take Mary, age 66, with an $800,000 nest egg.

If she follows the traditional 4% rule, she'd expect about $32,000 a year in income. But by allocating 30% ($240,000) to an annuity paying around 6.5% and keeping the remaining 70% ($560,000) invested at a 4% withdrawal rate, her blended income jumps to roughly $38,000 a year.

That's about a 19% lift — and she's done it without increasing her investment risk. Plus, part of that income is guaranteed for life.

Now imagine the confidence that brings. Knowing the basics are covered, even if the market hits a rough patch.

Note: This example is for illustrative purposes only and does not reflect actual results. Individual outcomes will vary based on age, product selection, payout rates, and market conditions.

Key Takeaways

The Goldman Sachs study shows that a smart mix of annuities and investments can improve income sustainability and spending confidence.

A hybrid income plan can help manage risk, inflation, and longevity — all major concerns for retirees.

Annuities are not a one-size-fits-all solution. But when used strategically, they can be a powerful foundation for retirement income.

It's about balancing growth and protection — not chasing returns or gambling on the next bull market.

Ready To Experience Annuity Guidance That Feels Human?

If a hybrid income strategy sounds like something worth looking into, we'd be happy to help you see how it might fit your retirement goals. You can schedule a no-cost annuity strategy call today. No pressure — just clarity and conversation. And don’t forget to subscribe to the Annuity Guys YouTube channel for more great retirement insights!

¹ Goldman Sachs Asset Management, 2025 Retirement Survey & Insights Report: New Economics of Retirement, October 2025. Survey of 5,102 working and retired Americans conducted July 2025. Available at: https://am.gs.com/en-us/advisors/insights/report-survey/retirement-survey

² Goldman Sachs Asset Management, 2025 Retirement Survey & Insights Report, October 2025. The 7.1% payout percentage is the average of the top 5 highest-paying single premium immediate annuities starting at age 65, averaging male and female rates, calculated using major retail annuity providers' offerings at May 2025 rates. The 23% income boost is calculated by comparing a blended withdrawal rate (30% SPIA at 7.1% + 70% traditional at 4%) to a traditional 4% withdrawal rate. Available at: https://am.gs.com/en-us/advisors/news/press-release/2025/retirement-survey-press-release