A guaranteed lifetime withdrawal benefit, or GLWB, is an optional annuity rider that lets you withdraw a set yearly percentage of a benefit base for the rest of your life, even if the account value runs down, while still keeping access to any remaining balance. It is backed by the insurer's claims-paying ability.
In plain terms: A rider that pays you a yearly income for life while you still keep your remaining balance.
A GLWB is like turning part of your nest egg into a self-refilling paycheck. You keep control of your account, but the rider promises the income keeps coming for life as long as you follow the withdrawal rules. The payout is usually a percentage of a benefit base that depends on your age when income starts. Because it is a rider, it typically carries an annual fee.
A GLWB addresses the fear of outliving your money by adding a lifetime income floor without fully handing your balance to the insurer. The trade-offs are the rider fee and rules you have to follow to keep the guarantee intact.
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