A potential solution for Bill and Mary.¹


Profile:  Bill, age 63; Mary, age 62
Expected retirement age: 65
Retirement savings: $1,250,000
Anticipated annual expenses in retirement: $91,250

Here's how the Schwab Retirement Income Variable Annuity® with the Income Generator rider could be used by a couple who is retiring soon. 

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.

Covering the essentials

Covering the essentials
Covering the essentials
Essential expenses: $51,250
Combined Social Security income: ($40,000)
Additional income needed for essentials: $11,250

To cover the remaining $11,250 of essentials, the couple invests in a $250,000 Schwab Retirement Income Variable Annuity with the Income Generator rider. $250,000 x 4.5% = $11,250 annual income (or more if the Protected Payment Base reaches a higher amount). The annual income is based on joint life for withdrawals beginning at age 65 based on the age of the youngest owner (Mary).

Investing for the extras

Investing for the extras
Investing for the extras
Discretionary expenses: $40,000
Portfolio income and withdrawals: $40,000

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.