Guaranteed Minimum Withdrawal Benefit - GMWB

Filed Under » ,
Dictionary Says

Definition of 'Guaranteed Minimum Withdrawal Benefit - GMWB'

A type of option that annuitants can purchase for their retirement annuities. This specific option gives annuitants the ability to protect their retirement investments against downside market risk by allowing the annuitant the right to withdraw a maximum percentage of their entire investment each year until the initial investment amount has been recouped.
Investopedia Says

Investopedia explains 'Guaranteed Minimum Withdrawal Benefit - GMWB'

The best aspect of this guarantee is that it protects annuitants against any investment losses that have been incurred without losing the benefit of upside gain. For example, suppose that Jamie's initial investment was $100,000, but due to downturns in the economy, the investment is now only worth $85,000. Since Jamie had purchased a guaranteed minimum withdrawal benefit with a rate of 10%, she will be able to withdraw a certain percentage each year (in this case, $8,500) until the entire $100,000 is recovered.

Articles Of Interest

  1.

    Variable Annuities With Living Benefits: Worth The Fees?

    Added features can make a variable annuity suitable for certain investors. Find out if it could work for you.

  2. The Cost Of Variable Annuity Guarantees

    These products tempt investors with some impressive benefits - but they come at a price.

  3. Should You Buy An Annuity?

    For many cash strapped seniors an annuity sounds like the perfect solution. And it can be if you think you’ll outlive your mortality date. The only trouble is that the insurance companies offering ...

  4. Analyzing The Best Retirement Plans And Investment Options

    Understanding the various retirement investments - from annuities to 401(k)s and everything in between - is crucial to reaching your retirement goals. Here, we examined many of the popular investments ...

  5. The 10 Worst Financial Decisions You Can Make In Retirement

    In this time of fiscal uncertainty, there are many financial decisions that can make or break you during your formative years.

  6. Mandatory Pension Savings: Should Employers And Employees Be Forced To Make Contributions?

    The scale of the pension crisis in the U.S. cannot be denied, and there's a growing movement that supports the mandatory pension system that's been created in Australia and other parts of the ...

  7. Money Tips To Stretch Your Retirement Nest Egg

    Learn the key investment and savings tips you need to ensure your retirement savings last as long as you do.

  8. How To Start Saving For Retirement

    If you establish these money-saving habits and patiently allow your wealth to build, you will be taking some huge steps forward in making your financial future more secure.

  9. An Introduction To The Keogh Retirement Plan

    Learn more about this popular defined-contribution retirement plan that many business owners, proprietors, and self-employed people can benefit from.

  10. How To Buy Annuities (And When Not To)

    Annuities are complicated products that require some basic homework to be done before requesting quotes. Retirees will want to think about how they envisage their lifestyle and even their potential ...
comments powered by Disqus
Marketplace
Hot Definitions

  1. Xenocurrency

    A currency that trades in markets outside of its domestic borders.

  2. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.

  3. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.

  4. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.

  5. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.

  6. Chartalism

    A non-mainstream theory of money that emphasizes the impact of government policies and activities on the value of money.
Trading Center
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=b4e15f39145c1cd34638830ef1198e1c