A potential solution for Bill and Mary.¹

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.

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).

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.