Variable annuities are often sold with guaranteed living withdrawal benefits, sometimes known as the GLWB or other similar acronyms. In a nutshell, these benefits give you a way to stay invested in the stock market with some income guarantees in place. These benefits became popular after the market crash of 2008 when people were looking for a way to protect their retirement savings from market loss.
In theory, these benefits may sound good, but they can be very costly, and in many cases, it’s the insurance company who might be coming out ahead. Here is what you need to know about the methods used to calculate these benefits so that you can decide for yourself: checkmate, stalemate, or just a losing proposition?