For example, you invest $100,000 in a variable annuity with a withdrawal percentage of 5%. In five y

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Fixed-index annuities (also referred to as equity-indexed annuities) and variable annuities can be useful options for retirement savings because interest organizing a conference earnings are tax-deferred until withdrawn. These annuities can also be converted to a stream of income payments that can last for the rest of your life (annuitization). However, annuitization generally requires that you exchange your annuity account balance for income payments. Due to growing demand for additional income options, organizing a conference many issuers are offering a rider, called a guaranteed lifetime withdrawal benefit (GLWB), to variable annuities and fixed-index annuities that allows

you to get lifetime income payments while continuing

organizing a conference to have access to the annuity's remaining cash value.
There are different variations of the GLWB rider, depending on the issuer offering it, and typically a GLWB option subjects the annuity organizing a conference owner to specific age restrictions or income limitations, depending on the specific optional benefit offered with a particular annuity. However, most issuers incorporate some common features. Your annuity organizing a conference premium is invested in subaccounts (with a variable annuity) or earns interest (with a fixed-index annuity). Thereafter, you can elect to receive annual withdrawals organizing a conference from the annuity that last for the rest of your life (minimum guaranteed withdrawal). The amount of the withdrawal is determined by applying a percentage (withdrawal percentage) to the premium or the cash value, whichever is greater at the time of your election. Withdrawals are subtracted from the cash value. The amount of the withdrawal will not decrease, even if the cash value decreases or is exhausted. In addition, you continue organizing a conference to control the investment of the remaining cash value within the annuity, and have access organizing a conference to it.
For example, you invest $100,000 in a variable annuity with a withdrawal percentage of 5%. In five years, you elect to begin receiving minimum guaranteed withdrawals, but the cash value is worth only $80,000 (due to poor subaccount performance). The withdrawal percentage (5%) is applied to your premium ($100,000) since it is greater organizing a conference than the cash value at the time of your election. Your minimum   guaranteed withdrawal is $5,000 per year ($100,000 organizing a conference x 5%).*
Some issuers apply a minimum rate of return to your premium (minimum income value) apart from your cash value. organizing a conference In this case, the withdrawal percentage is applied to the greater organizing a conference of your minimum income value or your cash value to determine your guaranteed minimum withdrawal. This option organizing a conference ensures that the amount of your minimum guaranteed organizing a conference withdrawal increases each year you defer receiving withdrawals.
To illustrate, use the same facts as the previous example, but include a minimum income value of 6% per year applied to your premium ($100,000). When you elect to receive withdrawals, the minimum income value is $133,823 ($100,000 x 6% per year x 5 years). Since this value is greater than your cash value ($80,000), the withdrawal percentage (5%) is applied organizing a conference to the minimum income value yielding organizing

a conference a minimum guaranteed withdrawal of $6,691 per year ($133,823 x 5%).*
Issuers may also increase your guaranteed minimum withdrawal by increasing the withdrawal organizing a conference percentage as the age at which you elect to begin receiving withdrawals increases. For example, the withdrawal percentage could be 5% if you start withdrawals at age 55, 7% at age 70, and 8% at age 80.
However, if you exceed organizing a conference the allowable withdrawal amount, you may adversely affect your ability to continue receiving guaranteed income payments. Consequently, you should carefully evaluate your specific financial needs and objectives in addition to the specific restrictions and limitations of a GLWB option.
It's possible the GLWB payments can increase over time if the issuer includes a step-up feature with the rider. At certain intervals (e.g., once a year), the issuer compares the annuity's current cash value to the value used to determine your minimum guaranteed withdrawal. If the current value is greater, the issuer applies the withdrawal percentage to the current, higher value, thus increasing your minimum guaranteed withdrawals.
Say your minimum organizing a conference guaranteed withdrawals are $7,500 per year, based on a withdrawal percentage of 5% applied to the annuity's cash value of $150,000. Five years later, the annuity's organizing a conference cash value increases to $160,000. organizing a conference The new minimum guaranteed withdrawal is $8,000 per year due to the increased cash value ($160,000 x 5% per year). The new minimum guaranteed withdrawal will not decrease, even if t