Is Now the Right Time for Guaranteed Lifetime Withdrawals?

Written by: Marshall Heitzman, CFP®, ChFC, FLMI, CPCU, BFA™

Feb 25, 2020 Share This 

GLWB_MomentAre guaranteed lifetime withdrawal benefits (GLWBs) poised to have a “moment?” That’s what David Hanzlik, Vice President of Annuity and Retirement Solutions at CUNA Mutual Group concludes.1

Despite some older Americans choosing to remain in the workforce, Baby Boomers continue to retire in droves. Roughly 3.8 million Boomers will turn 65 every year during this decade, which will have a significant impact on the labor force.2 It will also have a significant impact on the income of those retirees.

Overcoming Baby Boomer Fears

There are many issues threatening the golden years for Baby Boomers, including uneasiness over healthcare costs, the rising prices of consumer goods and housing, taxes, and the risk of long-term care expenses — not to mention potential market volatility. Couple those unknowns with the rapid decline of employer-sponsored pensions, lackluster participation in 401(k) plans, and the uncertainty surrounding Social Security benefits, and the anxiety builds.

Running out of money is a genuine concern. As retiring individuals transition from wealth accumulation to distribution, many are reconsidering their investment strategies. To overcome their fears, some look for products that can provide a level of guaranteed income throughout their lifetimes. 

Why Risk Averse Investors Are Considering GLWBs

As those approaching retirement consider their longevity risks and the real possibility of running out of money, they’re increasingly looking to guaranteed income products such as annuities. 

Some modern annuity products are gaining popularity as a result of the Secure Act recently signed into law. In fact, some employers are considering adding annuity options as part of their 401(k) plans. With only 10% of such employer plans currently offering annuities, there’s ample opportunity to expand retirement offerings to employees.3 

Another reason that annuities have become more appealing is that, unlike annuities of the past which had a bad reputation for being complex and having high fees, some modern products are much more straight-forward and transparent. In addition to guaranteed income and an affordable price point, they may also offer appealing features, such as more upside potential, guaranteed floors, beneficiary benefits, and the ability to withdraw balances at any time.

Yes, annuities with guaranteed lifetime withdrawals may just be poised to have a “moment.” Read more about the annuity trend, along with more detailed analysis, in the article written by CUNA Mutual Group’s own David Hanzlik, recently published by LIMRA.

Read the full article

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Marshall Heitzman
Written by: Marshall Heitzman, CFP®, ChFC, FLMI, CPCU, BFA™

Marshall is CUNA Mutual Group's Advanced Planning Expert and has more than 25 years experience in the insurance and financial services industry. He consults Financial Advisors on advanced retirement planning concepts for retirement and wealth management clients.



1LIMRA Secure Retirement Institute Review Issue 2 2019, Why Guaranteed Lifetime Withdrawal Benefits Are Poised to Have a Moment, 2019

2Pew Research Center, Baby Boomers are staying in the labor force at rates not seen in generations for people their age, July 24, 2019

3CNBC, More people may soon have annuities in their 401(k) plans, January 3, 2020


Topics: Advanced Planning, Risk Control