• ( ) Guaranteed lifetime withdrawal benefit
  
  Tax-deferred annuities can be a valuable tool, particularly for retirement savings.

  Fixed and variable annuities earn interest on premiums paid to the annuity issuer, and interest earnings accrue tax deferred prior to being withdrawn. Variable annuities offer purchasers a choice of investment subaccounts into which the premium may be allocated, whereas fixed annuities pay interest based on a fixed rate determined by the issuer. Both types of deferred annuities offer a minimum death benefit.

  Deferred annuities also provide withdrawal options including payments that last for the life of the purchaser (annuitization). Because of growing demand for additional income options, some issuers are offering a rider, called a guaranteed lifetime withdrawal benefit (GLWB), which allows you to get lifetime income while continuing to have access to the annuity's remaining cash.

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Income to last a lifetime

As growing numbers of Americans are approaching retirement age, they are seeking ways to generate reliable lifetime income. One of the greatest concerns of retirees is the risk of outliving their money, and the manufacturers of investment products are rushing to provide solutions to address investors' fears. Retirees today increasingly recognize the limitations of "income-only" withdrawal strategies and traditional retirement products such as immediate annuities. While many annuities contain assurances of distributions for life, the fixed payout products don't solve the challenge of keeping pace with inflation. Previous columns have addressed a variety of strategies that can help manage the distribution phase of an investment life-cycle. Income replacement funds, sometimes called managed income funds, are the newest generation of products that are targeted to retirees. More>>

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