What is a guaranteed income rider?

A guaranteed income rider is designed to provide an annuity holder with peace of mind by ensuring a minimum level of income from the annuity. This type of rider can be particularly valuable for individuals who want to secure a stable income stream for retirement, particularly if the underlying investments within the annuity have the potential for variable returns.

By providing a guaranteed income, this rider helps address longevity risk—the worry that a person might outlive their savings—by enabling a consistent payment for a specified period or for the annuitant's lifetime. This assurance is especially important for retirees who rely on their annuity for essential living expenses.

While other options touch on relevant aspects of annuities, such as investment risk and withdrawal limits, they do not capture the primary function of a guaranteed income rider, which is fundamentally about securing a baseline level of income.