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A guaranteed lifetime withdrawal benefit (GLWB) is a type of rider offered to certain annuitants that can help to protect their retirement savings from losses due to market volatility. A GLWB allows an annuitant to make a certain amount of withdrawals from their annuity account each year, regardless of how their investments have performed over time. This helps to provide the annuitant with some stability and security in retirement, as their withdrawals are guaranteed even if the markets take a turn for the worse.
The GLWB may also often provide a “stepped-up” benefit if the investments in the annuity subaccounts gain value. This means that if the investments in the annuity do particularly well, the annuitant will receive a bonus that is greater than the regular annual withdrawals. This bonus can help to provide a cushion in retirement and can provide the annuitant with more security if the markets take a downturn in the future.
Before signing up for a GLWB, it is important to understand the fees and charges associated with the rider, as these can vary significantly depending on the insurer and the annuity being used. Some typical charges associated with a GLWB include an insurance fee and an administration fee, as well as any other fees or commissions that are required by the issuer. It is important to read the fine print and understand all of the fees and charges before signing up for a GLWB, as a combination of fees and charges can add up quickly and may become a significant portion of the annuitant’s total retirement savings.
In summary, the GLWB is a rider that can provide annuitants with additional security and protection for their retirement savings in the face of market volatility. The GLWB offers a certain level of guaranteed withdrawals each year and may also provide a “stepped-up” benefit if the annuity investments gain in value. However, annuitants should be sure to understand all of the fees and charges associated with the rider before signing up, as these can vary significantly and can add up quickly over time.
The GLWB may also often provide a “stepped-up” benefit if the investments in the annuity subaccounts gain value. This means that if the investments in the annuity do particularly well, the annuitant will receive a bonus that is greater than the regular annual withdrawals. This bonus can help to provide a cushion in retirement and can provide the annuitant with more security if the markets take a downturn in the future.
Before signing up for a GLWB, it is important to understand the fees and charges associated with the rider, as these can vary significantly depending on the insurer and the annuity being used. Some typical charges associated with a GLWB include an insurance fee and an administration fee, as well as any other fees or commissions that are required by the issuer. It is important to read the fine print and understand all of the fees and charges before signing up for a GLWB, as a combination of fees and charges can add up quickly and may become a significant portion of the annuitant’s total retirement savings.
In summary, the GLWB is a rider that can provide annuitants with additional security and protection for their retirement savings in the face of market volatility. The GLWB offers a certain level of guaranteed withdrawals each year and may also provide a “stepped-up” benefit if the annuity investments gain in value. However, annuitants should be sure to understand all of the fees and charges associated with the rider before signing up, as these can vary significantly and can add up quickly over time.