The Jackson Life LifeGuard Freedom 6SM Net Guaranteed Minimum Withdrawal Benefit (GMWB) is available as an optional rider on Jackson National’s Perspective II variable annuity. This rider provides a guaranteed minimum withdrawal amount for the lifetime of the annuity holder, regardless of the investment performance. It is designed to offer both growth potential and income protection during retirement.
Here are the key details of this benefit:
1. Guaranteed Lifetime Income
- The LifeGuard Freedom 6SM Net GMWB rider guarantees that you can withdraw a certain percentage of your benefit base (a value tied to your initial investment) for life, regardless of the performance of the underlying investments. This ensures a steady income stream during retirement.
2. Annual Step-Ups
- The benefit base can increase each year through “step-ups” if the underlying investments perform well. This means your guaranteed withdrawal amount could increase if your portfolio grows, but it won’t decrease if the investments underperform.
3. Withdrawal Rates
- The withdrawal rates are typically around 5% to 7% annually, depending on the age at which you start taking withdrawals. The longer you wait to begin withdrawals, the higher the percentage you may be able to withdraw each year
4. Fees
- Like many annuity riders, the LifeGuard Freedom 6SM Net GMWB comes with an additional cost, typically as a percentage of your annuity’s value. This fee is deducted annually and varies based on the specifics of your contract.
5. Restrictions
- To maintain the guarantees provided by this rider, there are certain restrictions. For example, if you withdraw more than the allowed percentage in a given year, you may lose the guarantees. This is a key consideration for anyone planning to use this benefit
This rider is designed to offer retirees the dual benefits of market growth potential with the security of guaranteed income, making it a popular option for those looking to balance risk and security in their retirement planning. Always consult the specific terms and conditions of your contract, as these details can vary.
