How to Guarantee a 7% Safe Withdrawal Rate in Retirement

Shawn Plummer

CEO, The Annuity Expert

See If You Can Receive 7% Withdrawals

Use the following tool to see how high your withdrawal rate in retirement will be. Earn an 8% withdrawal from your retirement savings accounts without worrying about running out of money in retirement.

Understanding Fixed Index Annuities with a Guaranteed Lifetime Withdrawal Benefit (GLWB)

A Fixed Index Annuity with a Guaranteed Lifetime Withdrawal Benefit (GLWB) is a financial product designed to provide retirees with a steady income stream. This tool can be crucial for maintaining financial stability in retirement. Here’s how it works:

  1. Guaranteed Withdrawal Rates at Different Ages:
    • At age 60, a GLWB offers up to a 7.2% safe withdrawal rate.
    • At age 65, the withdrawal rate increases to up to 7.93%.
    • By age 70, retirees can withdraw up to 8.55%.
  2. Contractual Guarantee:
    • The GLWB ensures that a retiree receives the agreed-upon amount regularly, even if the annuity’s account balance is depleted.
  3. Interest-Earning Potential:
    • While withdrawals are made, the annuity account can still earn interest, potentially increasing the value of the remaining balance.
  4. Beneficiary Benefits:
    • Any remaining balance in the annuity account can be passed down to designated beneficiaries, offering estate planning advantages.
  5. Inflation Protection Option:
    • There’s an option to accept a lower initial withdrawal rate (up to 7.41%) with the potential for regular increases to keep pace with inflation.
How To Guarantee A 7% Safe Withdrawal Rate In Retirement?

7% Withdrawal Rates By Age

Age at Withdrawal StartMaximum Withdrawal RateInflation Adjustment Option
607.2%Available
657.93%Available
708.55%Available

Conclusion

Investing in a Fixed Index Annuity with a GLWB is a strategic way to ensure a stable income in retirement, with withdrawal rates up to 7.2% at age 60, 7.93% at age 65, and 8.55% at age 70. It offers financial security, interest-earning potential, and benefits for heirs. To maintain purchasing power against inflation, there’s an option for regular rate increases. For those seeking a reliable income stream in retirement, this financial tool can be a valuable addition to retirement planning.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, 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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