A potential solution for Bill and Mary.¹
|Profile:||Bill, age 63; Mary, age 62|
|Expected retirement age:||65|
|Anticipated annual expenses in retirement:||$91,250|
Here’s how the Schwab Retirement Income Variable Annuity® with the GLWB 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|
|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 GLWB. $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|
|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.