An income rider is a specific type of annuity rider that guarantees you can withdraw a certain amount of income each year for the rest of your life, even if your annuity's account value drops to zero. It's one of the most popular annuity riders because it provides the security of lifetime income without requiring you to annuitize and permanently give up access to your principal.

Here's how income riders typically work: The insurance company tracks two separate values—your actual account value (which fluctuates with market performance and withdrawals) and a separate "income base" or "benefit base" used only to calculate your guaranteed withdrawal amount. This income base might grow by a guaranteed percentage each year (often 5-7%) as long as you don't take withdrawals. Once you activate the rider (usually at age 60 or later), you can withdraw a guaranteed percentage of that income base annually (typically 4-6% depending on your age) for life, regardless of market performance.

Income riders sound attractive, but they come with important limitations and costs. They typically charge 0.75% to 1.5% annually, significantly reducing your growth potential. The "guaranteed growth rate" only applies to the income base calculation, not your actual account value. If you need to withdraw more than the guaranteed amount, you might violate the rider terms or reduce future income. And if you die early, the income rider often provides no value—your beneficiaries simply receive whatever account value remains. Income riders work best for people who want lifetime income guarantees but also want to maintain account access for emergencies or legacy planning.