GMWB is an acronym that stands for guaranteed minimum withdrawal benefit. A GMWB is an optional “living benefit” guarantee that can be embedded into a variable annuity product. The GMWB allows the contract holder to, at a minimum, withdraw a fixed percentage of the total annuity premiums each year regardless of market performance. The income payments are guaranteed until the total premium is recovered. The GMWB does not require annuitization. For example, Catherine invests $150,000 into a variable annuity and selects a GMWB that provides 4% annually. The capital markets have performed terribly and as a result the variable annuity contract value is only $75,000 at the end of 10 years. Catherine is in a good position though because she will receive $6,000 ($150,000 x 4%) per year until the $150,000 is recovered.

Annuity Fees and Expenses

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Annuity Digest Buying Guide: Annuity Fees and Expenses



New Study Assesses Use of Annuities in Wealth Management Strategies

Two industry-leading consultants have published a study that compares a range of wealth management strategies that are available to individuals in retirement. None of the strategies are dominant on an overall basis, but certain approaches show clear strengths in terms of income generation, levels of wealth, and the impact on bequest motives. The dramatic impact of product fees is also addressed. Six different retirement strategies are discussed: Systematic withdrawal from mutual funds. Fixed...


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High expenses or fees are one criticism I have heard regarding annuities. Can you explain the fee structure around annuities?

Annuities are products that combine insurance and, in the case of variable annuities,