Annuity income floor is the minimum level of income that an annuity or income rider guarantees a client will receive, regardless of market performance, for as long as specified in the contract"often for life. The income floor represents a baseline of predictable cash flow that can be combined with Social Security, pensions, and other sources to cover essential expenses. By providing a floor, annuities help mitigate longevity and sequence-of-returns risk, giving clients confidence that their basic living costs can be met even if markets are volatile or they live longer than expected.

Advisors use annuity income floors as part of a "floor-and-upside" retirement income strategy, first securing a reliable base level of income and then investing remaining assets for growth. They calculate how much annuity funding is required to establish a desired floor and test scenarios where the floor covers core expenses like housing, food, and healthcare. Advisors communicate that while the floor is guaranteed, inflation and discretionary spending may still require flexible portfolio withdrawals. Regular reviews reassess whether the income floor remains adequate as costs change. Understanding annuity income floors helps advisors craft retirement plans that address both the emotional need for security and the financial need for long-term sustainability.