|Profile:||Bill, age 63; Mary, age 62|
|Expected retirement age:||65|
|Anticipated annual expenses in retirement:||$91,250|
The income plan: The couple estimates that they will need $51,250 to cover essential expenses and have budgeted an additional $40,000 for travel, hobbies, entertainment, and other discretionary expenses. They would like to generate income while continuing to invest and maintain access to their assets.
To cover the remaining $11,250 of essentials, the couple invests in a $250,000 Schwab Retirement Income Variable Annuity with the GLWB.
$250,000 x 4.5% = $11,250 annual income (or more if the Protected Payment Base reaches a higher amount).
The couple plans to invest the remainder of their portfolio ($1,000,000) in a diversified portfolio of stocks and bonds, withdrawing 4% ($40,000) the first year and increasing the withdrawal each year by the rate of inflation.
1. Hypothetical example is not meant to suggest future investment performance or the suitability of any investment or strategy for any particular investor.
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