Shopping for Lifetime Income Benefits
All lifetime income benefits are not created equal, so shop around – with the help of a qualified financial professional you trust. The process involves three steps:
Step 1: Evaluate the Features of the Riders Themselves
- Look for a lifetime income benefit of at least 5%. Bottom line: you want to be sure the lifetime income benefit’s maximum withdrawal amount is consistent with your income needs.
- Look for a plan with a strong step-up feature, which allows you to “reset” and lock into the contract’s highest anniversary value whenever the actual account value exceeds the guarantee, and then receive income off the new, higher number.
- If you have a spouse, look for a spousal lifetime benefit of 5% to 6.5%, so if one spouse dies, the surviving spouse gets the withdrawal benefit for as long as he or she lives.
- Compare rider fees. Keep in mind, a lower fee does not always mean a better lifetime income benefit. Other factors, such as step-up, maximum withdrawal percentage, and other plan features, should also be part of the equation.
- Look for a plan that allows resets to advanced ages. We generally favor plans that allow resets until age 85+.