A variable annuity is a long-term investment for retirement that offers tax-deferred growth potential and a variety of investment options. Variable annuities can offer a wide range of features including a guaranteed death benefit and income for life.
Guarantees are subject to the terms and conditions of the contract and are backed by the claims-paying ability and financial strength of the issuing insurance company, not Schwab. Guarantees do not apply to the separate account or the underlying portfolios available within the contract. A GLWB is not a contract value and is not available for withdrawal like a cash value. The actual contract value will deplete with each withdrawal.
Questions about annuities? Contact an annuity specialist at 866-663-5241.
Compare Schwab's variable annuities.
Schwab offers a choice of two competitively priced1 variable annuities, along with personal guidance from an annuity specialist to help you choose the one that meets your retirement income needs.
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More Comparisons Schwab Retirement Income Variable Annuity Schwab OneSource Choice Variable Annuity Design Details Straightforward design offers three investment options which are all GLWB-eligible. More information. Dual-segment design offers you flexibility to shift between tax-deferred growth potential and income protection as your needs change.4
- Investment Segment allows you to participate in the growth potential of the market.
- Income Segment provides a guaranteed floor of retirement income with a GLWB.
Costs Lower Low Base annuity fee
- 0.60% if purchased with the return of account value death benefit
- 0.80% with the Return of Purchase Payments Death Benefit
- 1.00% with the Stepped-Up Death Benefit
- 0.65% if purchased with return of account value death benefit
- 0.85% with return of premium death benefit
Underlying investment costs 0.57% to 0.61%5 Average subaccount net expense by segment as of May 1, 20206
- Investment Segment: 0.90%
- Income Segment: 0.78%
Calculated off of the Benefit Base and charged quarterly against the Covered Fund Value.
- 0.90% Individual and Joint9
Annual guaranteed income8 Beginning at age 65, you can receive 5% of the Protected Payment Base for the single life rider and 4.5% for the joint life rider. Beginning as early as age 59½, you can begin receiving annual withdrawals ranging from 3.5-6.5% of the Benefit Base depending on age and single or joint life.9 See details. Tooltip
Return of account value Beneficiaries receive any remaining contract value, less premium taxes prior to annuitization. Beneficiaries receive current account value (less premium taxes). Available for those younger than 86 at time of purchase. Optional death benefits If protecting your beneficiaries is a priority, you can purchase one of two optional death benefits for an additional fee at the time you purchase the annuity. These optional death benefits are available for purchase to owners and annuitants 75 years or younger. Cannot be combined with the GLWB option.
- The Return of Purchase Payments Death Benefit provides your beneficiaries with the greater of the contract value or the total of purchase payments, adjusted for withdrawals prior to annuitization. Additional cost 0.20%
- The Stepped-Up Death Benefit offers you the potential to lock in market gains for your beneficiaries. Additional cost 0.40%
Beneficiaries receive total contributions (less the proportional impact of any distributions, withdrawals, and premium taxes) or the contract value (less premium taxes), whichever is greater. Available for those younger than 86 at time of purchase. Additional cost 0.20%. Investments Three broadly diversified portfolios to simplify retirement investing. A wide range of investment options providing investment flexibility.
- Choose one of three broadly diversified portfolios, each with a different risk profile.
- Portfolios are managed, monitored, and rebalanced by Charles Schwab Investment Management, Inc., an affiliate of Schwab.
- Investment Segment offers over 95 investment options managed by a variety of outside investment managers who participate in Schwab's OneSource program. You can select portfolios to tailor your asset allocation plan to meet your needs.
- Income segment offers four investment options with the GLWB.
Issuer Pacific Life Insurance Company (In New York, Pacific Life & Annuity Company) Great-West Life & Annuity Insurance Company (In New York, Great-West Life & Annuity Insurance Company of New York) Financial strength rating10 Pacific Life Insurance Company and Pacific Life & Annuity Company11 Great-West Life & Annuity Insurance CompanyGreat-West Life & Annuity Insurance Company of NY12
The guaranteed lifetime withdrawal benefits referenced above are optional riders for which you will incur an additional charge, as shown above. The Protected Payment/Benefit Base on which the guaranteed lifetime income is based is not a contract value, cannot be accessed like a cash value, and cannot be left to your beneficiaries as a death benefit. Additionally, a GLWB will not preserve your contract value, which will decrease with each withdrawal until it reaches zero, although payments under the terms of the rider will still continue for life. Restrictions and limitations apply. See the prospectus for details.
All guarantees are based on the financial strength and claims-paying ability of the issuing insurance company (not Schwab).
For variable annuities you will typically see insurance charges (pays for the guarantees that the insurance company provides), surrender charges (charge on an early withdrawal based on a the time period of the policy or cancellation of the policy), investment fees (pays for the management of the underlying investment options), and, if elected, fees for optional living benefits or optional death benefits (fees that pay for the guarantees that the optional benefits provide).
Variable annuities offered by Charles Schwab do not have surrender charges.
There are two ways to receive guaranteed lifetime income: 1. Converting your assets into a series of periodic payments (annuitization) for life or a specific period of time. There is no cost for this option and you give up control of your assets. 2. For an additional cost, you can choose an optional guaranteed lifetime withdrawal benefit that provides guaranteed income for life, the ability to control your assets and remain invested in the market.
Withdrawals from an annuity will reduce the value of your annuity, and withdrawals of taxable amounts are subject to ordinary income tax. Withdrawals prior to age 59½ may be subject to a 10% Federal tax penalty.
The performance of the underlying investment options is subject to market fluctuation and are not guaranteed. The contract value of the annuity may be more or less than the premiums paid and it is possible to lose money.
Withdrawals will reduce the death benefit amount in direct proportion to the percentage by which the contract value was reduced. This can increase or decrease the amount deducted from the death benefit.
Variable annuities are subject to a number of fees, including mortality and risk expense charges, administrative fees, premium taxes, investment management fees, and charges for additional optional features. Although there are no surrender charges on the variable annuities offered by Schwab, such charges do apply in the early years of many contracts.
A Schwab annuity specialist can help you determine which annuity might fit your retirement strategy.
Before considering an exchange of your current annuity, carefully consider surrender charges on your existing contract, loss of guaranteed benefits, and differences in features, costs, services, and company strength, as well as other factors that could reduce or eliminate the benefit of an exchange.
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