What is a GLWB
Jason Stolz CLTC, CRPC
What is a GLWB? A Guaranteed Lifetime Withdrawal Benefit (GLWB) is an optional feature—often called an income rider—that provides guaranteed lifetime income from an annuity, even if the contract’s account value eventually runs out. It’s a simple way to turn your retirement savings into a personal pension with flexibility and control.
At Diversified Insurance Brokers, we help clients compare GLWB options from over 100 A-rated carriers. These riders are designed for people who want a reliable stream of income, the ability to defer start dates for higher payouts, and the assurance that income won’t stop, even in volatile markets.
See Guaranteed Lifetime Income Options
Compare annuities with GLWB riders, income bonuses, and joint lifetime benefits from top carriers.
Lifetime Income Calculator
Estimate your guaranteed lifetime income with a GLWB-equipped annuity.
How a GLWB Works
The GLWB allows you to take lifetime withdrawals based on a benefit base—a notional value that may grow by a fixed roll-up rate (e.g., 6%–8%) each year you defer income. Once you activate the rider, your income is determined by your age, benefit base, and the payout percentage locked in at the time income begins.
Even if your account value declines to zero, the insurance company continues making payments for life. The result is a steady, predictable income stream, even in challenging market conditions.
Benefits of a GLWB
- Guaranteed income for life—no matter how long you live.
- Principal protection through fixed or fixed indexed annuity design.
- Flexibility to start income when it fits your plan.
- Optional spousal continuation ensures both lives are covered.
- Tax-deferred growth during the accumulation phase.
GLWB Fees and Costs
Most GLWB riders charge an annual fee, generally 0.75%–1.25% of the account value. This fee funds the lifetime income guarantee and does not reduce the payout you receive once income starts. It’s significantly lower than most variable annuity fees, which often exceed 2%.
GLWB vs. GMIB
The Guaranteed Minimum Income Benefit (GMIB) requires annuitization—converting your account into fixed payments. A GLWB lets you access lifetime income while maintaining ownership and control of your funds. You can still withdraw excess amounts, name beneficiaries, and preserve liquidity.
How the Roll-Up Rate Boosts Income
The roll-up rate is a guaranteed growth rate applied to your benefit base before income begins. The longer you defer, the higher your benefit base grows—raising the lifetime payout amount. Many annuities also include performance-based “step-ups” that lock in market gains when index returns exceed the roll-up rate.
Spousal Continuation Options
Married couples can add a spousal continuation rider, ensuring income continues for the surviving spouse’s lifetime. These options are typically structured as “joint life with 100% continuation” or “50% survivor benefit,” depending on preference.
Compare GLWB Annuity Payouts
We’ll analyze multiple carriers and illustrate guaranteed income options side by side.
Request Personalized QuotesTalk With an Advisor Today
Choose how you’d like to connect—call or message us, then book a time that works for you.
Schedule here:
calendly.com/jason-dibcompanies/diversified-quotes
Licensed in all 50 states • Fiduciary, family-owned since 1980
FAQs: Guaranteed Lifetime Withdrawal Benefit (GLWB)
Is a GLWB the same as an income rider?
Yes. A GLWB is the technical term for most income riders used on fixed and fixed indexed annuities.
Does a GLWB reduce my account value?
Only withdrawals and rider fees affect the account value. Your income base grows separately and determines the guaranteed lifetime payout.
What happens if my account value hits zero?
The insurance company continues paying your income for life. That’s the core guarantee of a GLWB rider.
Can I take out extra money if I need it?
You can withdraw above your guaranteed amount, but it may reduce future income guarantees. We’ll show side-by-side illustrations for clarity.
Are GLWB payments taxable?
Payments from qualified funds (IRA, 401(k)) are taxed as ordinary income. Non-qualified contracts use the exclusion ratio until gains are fully recovered.
