Guaranteed Lifetime Withdrawal Benefit Annuities

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

What is a GLWB Annuity?

A GLWB annuity is an insurance product designed to provide you with a guaranteed income stream for life. It combines the growth potential of an investment with the security of a guaranteed income, making it a popular choice for retirees looking for long-term financial stability.

How does a GLWB Rider work?

A GLWB rider is an optional add-on to a variable or fixed-index annuity. By purchasing this rider, you secure the right to withdraw a specified percentage of your account value each year for the rest of your life, regardless of market performance or how long you live. The withdrawal percentage typically depends on age and may increase as you age.

Glwb Meaning

Critical features of GLWB Annuities

  • Guaranteed income for life: GLWB annuities ensure you will receive a steady income stream for as long as you live.
  • Flexibility: You can choose when to start receiving withdrawals and adjust the amount withdrawn based on your needs.
  • Market participation: Your account value can grow based on market performance, offering the potential for increased income over time.

How to choose the suitable GLWB Annuity

Assessing your financial needs and goals

Before choosing a GLWB annuity, evaluate your financial needs and retirement goals. In addition, consider your desired retirement lifestyle, other income sources, and risk tolerance.

Evaluating fees

GLWB annuities can come with higher fees than other annuity options. Be sure to compare the fees associated with different GLWB products and consider whether the benefits outweigh the costs.

Seeking professional advice

Given the complexity of GLWB annuities and the range of options available, it’s crucial to seek the guidance of a financial advisor. They can help determine whether a GLWB annuity fits your retirement strategy and guide you through selection.

Related Reading: GLWB vs GMWB Annuities

Glwb Annuity

The benefits of incorporating GLWB Annuities in your retirement strategy

Guaranteed income for life

One of the most significant advantages of a GLWB annuity is the assurance of a steady income for the rest of your life. This can provide peace of mind and financial security throughout your retirement.

Flexibility and control

GLWB annuities offer the flexibility to adjust your withdrawal amounts based on your needs and the market’s performance. This allows you to maintain control over your financial resources during retirement.

Protection from market volatility

GLWB annuities help protect you from market fluctuations by guaranteeing a lifetime income. So even if the market performs poorly, you’ll still receive a steady income stream.

Guaranteed Lifetime Withdrawal Benefit

Next Steps

In summary, Guaranteed Lifetime Withdrawal Benefits (GLWB) are a great choice for anyone who wants a steady income after they retire. They make sure you get a regular amount of money, no matter how the stock market is doing, giving you peace of mind and financial security. This makes GLWB perfect for people who want to be sure they have a reliable income without taking big risks. In short, GLWB is a smart pick for a worry-free and stable financial future in your retirement years.

Glwb Rider

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Questions From Our Readers

What is a guaranteed lifetime withdrawal benefit on an annuity?

A Guaranteed Lifetime Withdrawal Benefit (GLWB) rider can be added to a variable annuity. This rider will provide a guaranteed income for life if the market experiences a significant downturn. However, it is essential to note that this rider has an additional cost and that the guarantee is contingent upon the insurance company’s ability to pay claims.

What are the pros and cons of a guaranteed lifetime income annuity?

Retirement annuities offer both positives and negatives. The benefits include a guaranteed income, customizable options, and tax-deferred growth. However, the downsides include complexity, high fees, and restricted access to your funds in case of an early withdrawal.

Can you withdraw a lifetime annuity?

You have the option to withdraw your money from an annuity at any point in time. However, it’s essential to know that you will only receive a part of the total value of the annuity contract when you do so.

What happens if you outlive your annuity?

If your annuity has a fixed payment period instead of paying out for life, you will stop receiving payments when that period ends. This is a risk of annuities.

What is the difference between a guaranteed life annuity and a living annuity?

To clarify, a life annuity provides a guaranteed income for your entire life. In contrast, a living annuity gives you more control over your investments and greater flexibility but does not come with a guaranteed lifelong income.

Are lifetime annuities safe?

Annuities are considered low-risk compared to traditional investments like stocks and bonds due to their fixed rates and guaranteed income. In addition, they are designed for retirement and, therefore, can be considered a safe option for retirement savings.

If you are receiving income from an annuity with a Guaranteed Lifetime Withdrawal Benefit (GLWB) based on a single life, will your spouse continue to receive your income after you pass away?

Typically, in a single-life GLWB annuity, the income payments are designed to continue only for the annuitant’s lifetime and cease upon their death. However, some annuities may offer an option where the surviving spouse can recalculate the lifetime income to receive a new, potentially lower, income payment.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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