The Schwab Retirement Income Variable Annuity® is a streamlined product designed to simplify investing. It offers two optional living benefits to provide a base level of retirement income for life plus access to your assets2 and two optional enhanced death benefits.3
Optional living benefits
By purchasing the annuity's GLWB, you can help secure an income stream for the rest of your life (and your spouse's*, if you choose) that's protected from market losses and has the potential to increase with market gains.2
By purchasing the annuity's Future Income Generator, you can help secure an income stream for the rest of your life (and your spouse's*, if you choose) and has the potential for guaranteed increases for each year you defer taking income (up to 10 years) or through market gains on contract anniversaries.
Hypothetical Example - Let's say you purchase the variable annuity with Future Income Generator. The next year, the market falls, reducing your annuity contract value. A 5% simple interest credit will be added to the protected payment base (the amount your future income is based on) each year assuming that no withdrawals have been taken. The protected payment base will not be reduced due to a down market. Note - the protected payment base protects your income only, not your contract value.
*A spouse is considered a married partner. In some states that can also include a domestic partner or civil union partner.
No surrender charges
Many annuities charge you a fee if you make a withdrawal before a specified period of time. With variable annuities from Schwab, there are no surrender charges if you decide to withdraw your money for any reason.2,8
Hypothetical Example - Let's say that you need a portion of your account to cover a large, unexpected medical bill. With a variable annuity at Schwab, there's no fee for withdrawing your money.2,8
Optional death benefits
With an annuity, you name one or more beneficiaries. A death benefit is the amount beneficiaries will receive when you die. The most basic death benefit is the "return of account value," where your beneficiaries receive the current contract value. Another common death benefit is a "return of premium," (typically for an additional fee) where your death benefit is equal to everything you've paid for the annuity, minus withdrawals and any applicable premium taxes. Another type of optional death benefit is the stepped-up death benefit (typically for an additional fee), and many stepped up death benefits pay the higher of the contract value at death or the highest contract anniversary value since the purchase of the annuity. Withdrawals will reduce the optional death benefits on a pro-rata basis. For all of these death benefits, the proceeds may bypass probate.
Hypothetical Example - Let's say that a big market downturn has significantly reduced the value of your annuity at the time of your passing. Because you purchased a return of premium death benefit, market losses will not decrease the amount your beneficiaries receive.
Three broadly diversified portfolios to simplify retirement investing
$100,000 minimum initial contribution at Schwab
Issuer: Pacific Life Insurance Company (in New York, Pacific Life & Annuity Company)