New Annuity Upgrades From Vanguard

Vanguard recently made some positive changes to their annuity and mutual fund products, according to Forbes’ Mel Lindauer.  The article, “Welcome changes at Vanguard,” highlights three important changes made by the company.  First, Vanguard eliminated their Asset Allocation Fund, which allowed the fund managers to use whatever percentage of equities they felt was best.  This Asset Allocation Fund had been used in Vanguard’s LifeStrategy Funds and took away the investors’ ability to manage their risk level because they had no control over their asset allocation.

There are two new annuity funds from which to choose if you have a Vanguard annuity.  The new sub-accounts are the Moderate Allocation Portfolio and the Conservative Allocation Portfolio.  The first has 60% stocks and 40% bonds and strives to appreciate your capital while giving you low to moderate income.  The Conservative Allocation Portfolio has 40% stocks and 60% bonds.  It’s purpose is maintaining your current income while providing low to moderate capital appreciation.

A Guaranteed Lifetime Withdrawal Benefit is now available with Vanguard’s annuity products.  It is an option with the new Moderate and Conservative Allocation Portfolios as well as with their Balanced Portfolio.  The Balanced Portfolio has been around for awhile and gives the option of 60-70% stocks balanced with 30-40% bonds.  The GLWB option has been increasingly popular and Vanguard’s annuity holders are excited for this new choice.  Vanguard welcomes new clients who have an annuity they’d like to transfer to one of Vanguard’s new choices.

Written by Rachel Summit

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