A tale of two Retirees
We're going to look at two retirees.
Same age, same amount of money heading into retirement with very different outcomes.
An overview of the numbers
Jim & Steve are both 65 and have worked hard to save and invest money for retirement.
They now both have $1,000,000 in their 401k's.
Both have paid off houses, cars and no debt.
Jim's plan
Jim feels comfortable in his retirement and is planning on pulling $40,000 per year from his $1 Million.
If the market has an above average year, he may pull more money out.
Additionally, he will begin collecting Social Security in two years.
After reviewing his numbers on SSA.gov Jim sees that he will be able to collect $2850/mo.
Steve's plan
Steve knows that he's done a decent job saving but fears that leaving all his money in the market might be a mistake.
He's looking at options to diversify his money while still being able to experience gains in the market.
Just like Jim, Steve is looking to pull roughly $40,000 per year from the $1 million.
He's considering taking social security at age 67 which will be $2850/mo, the same as Jim.
Jim's plan
Jim feels very good about having his money in the market. After all, it's been a historical bull run leading up to his retirement. He's not sure the next 10 years will be as good as the last 10 but he's feeling confident.
He's moved all his money into the S&P500 so he can "be the market" and not pay high broker fees which would otherwise eat at his gains.
Since I can't seem to find my crystal ball we're going to look at some 10 year periods from the past to simulate what "might" happen.
Here's how it would look if Jim had retired in 2007. For comparison on this chart we have a very conservative 5% Fixed Annuity product.
2007 saw a gain in the S&P500 of 3.5%, not great... but not a loss either.
2008 was a train wreck seeing a 38.5% drop! For context in this scenario the market would need to rebound by 62.6% to get back to even.
At the end of the 10 year cycle the very conservative 5% Annuity beat out the S&P500 by $175,670.
If we compare it to a FIA product that we would typically suggest retirees look at you can see a difference of $243,896 in favor of the Annuity (image below).
Now... please don't read this and think we're saying "The market is bad" and "Annuities are good".
The truth - Some Annuities are absolute garbage with high fees and extreme volatility. We leave these where they belong, in the trash.
More truth - balance is needed. Annuities can be used to help provide the income you need in retirement while the rest of your money can be exposed to the market... and big drops won't impact your life at all.
With that... lets look at Steve's plan.
Steve's plan
Steve was nervous of a market crash heading into retirement so he moved half of his money into an Annuity at age 60.
At age 65 he's able to draw $48,771 a year.
In addition to that, he's also able to see his income increase every year because he selected the inflation based income option.
Like Jim, Steve also has money in the S&P500 ($500,000) but this is bonus money that he doesn't have to touch. It could go up or down and it won't impact Steve's plan because he already has the income he needs.
Now, to be fair to the market we're going to take a look at what happened in the last 10 years of the S&P500 and compare that to the FIA product.
With the historic bull run we've seen the S&P500 would have beat just about anything (as I write this the S&P500 is up 262.75% in the last 10 years while the NASDAQ is up 417.12%)
This is why we suggest balance.
Put the amount you must have into something safe and never put everything you have into ANYTHING.
If you're ready to Crash-Proof your retirement plan, click the button below. We'd love to talk with you and help you gain clarity around your numbers.
Ready to Crash-Proof your business?
Let's chat and see if we're a fit
Copyright Strategy Maverick 2026 -- All Rights Reserved
We’re on a mission to help our retirees gain income stability