The Role of Guaranteed Minimum Benefit Riders in In-Plan Annuities
November 17, 2020 by Contributor
When it comes to annuity riders such as a guaranteed minimum withdrawal benefit (GMWB), or other types of riders being used for in-plan choices, there are two main approaches that are currently most popular in retirement plans, says Eric Henderson, president of Nationwide Annuity at Nationwide Financial.
“The first is a variable annuity with a guaranteed lifetime withdrawal benefit [GLWB] rider,” Henderson says. The GLWB allows the annuity owner to take regular or occasional withdrawals from the annuity during the accumulation period before it is annuitized. Henderson says this option is also very popular in the retail world. Should the market perform well, the annuitant can get that upside, and even if the account value went to zero, the annuitant would continue to get the guarantee, he notes. “It guarantees you to get some amount no matter how the market performs or how long you live,” Henderson says.