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What is a GLWB & how does it work?

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Jose Luis Pelaez Inc/Getty Images

Annuities can be excellent tools for building wealth and securing your income in retirement. Depending on your needs, you may want to add contract provisions (called riders) that tailor your annuity for potential scenarios. One such rider is a guaranteed lifetime withdrawal benefit (GLWB).

A GLWB rider provides a minimum payout level, even if market losses reduce the contract's cash value. Here's an overview of a guaranteed lifetime withdrawal benefit, how it works, and the pros and cons of including one in your contract.

What is a guaranteed lifetime withdrawal benefit (GLWB)?

A GLWB is an optional annuity rider (available for a fee) that allows you to take guaranteed annual withdrawals that continue even if the cash value of your contract is depleted. You don't have to decide to begin withdrawals at the time of purchase, you can make that decision at a later date.

This flexibility can help you relax knowing you have more options for planning when your retirement income will begin.

GLWB riders for variable annuities

Guaranteed lifetime withdrawal benefits are especially useful as a way to protect your future income in retirement. A variable annuity allows you to invest your premiums in subaccounts so you can benefit from the potential return of the stocks and bonds held within those subaccounts during the accumulation phase.

The expectation is that, during the accumulation period, your accounts may grow so the account value is larger when you reach retirement. In turn, this may increase the income distributions as you begin to take GLWB withdrawals. However, it also introduces a certain amount of risk because your account value may not grow, it may grow more slowly than you expect, or your account may decrease in value.

A GLWB rider can help protect you from that risk by providing guaranteed annual withdrawal amounts regardless of the subaccounts' investment performance, assuming certain rules and conditions are met.

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How guaranteed lifetime withdrawal benefits work

When you have a variable annuity with a GLWB rider, your contract includes two separate values: the accumulated value and the benefit base. You can generally withdraw an amount equal to your benefit base multiplied by the withdrawal percentage during each contract year.

Accumulated value

This is your annuity's value based on the premium paid and the performance of the chosen subaccounts. It may increase or decrease each year. The potential benefit of variable annuities is that the account may grow over time.

You can access it at any time, although surrender charges, taxes and tax penalties may apply.

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Benefit base

The GLWB rider has a calculation for a benefit base. This is the amount used to determine your annual withdrawals and rider fees and is separate from your accumulated value. Your initial benefit base is the amount you contribute to the contract at the time of purchase.

Increases to your benefit base

Your benefit base may also increase each year by a percentage stated in your contract if specific conditions are met. For example, your benefit base might increase by 6% each year that no withdrawals are made. If your initial benefit base is $100,000, then it would increase to $106,000 on the anniversary date of your contract.

GLWB riders may contain a step-up feature as well. With this feature, your benefit base "steps up" to your accumulated value if that value is higher than your benefit base. In this case, if your accumulated value was $110,000, then your benefit base would be $110,000 instead of $106,000.

Decreases to your benefit base

Your benefit base may decrease if you take distributions that exceed your guaranteed annual withdrawal amount in a given year. The benefit base could also decrease due to rider fees being greater than subaccount gains.

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Guaranteed annual withdrawal amount

Your guaranteed annual withdrawal amount is generally determined by multiplying your benefit base by the applicable withdrawal percentage.

The withdrawal percentage varies based on your age at the time you begin GLWB withdrawals. The following table provides an example. In the case of a joint GLWB, a good rule of thumb is to use the youngest person's age.

Contract age


50 to 59
60 to 64
65 to 69
70 to 74

Using this table as an example and assuming a benefit base of $300,000, a 62-year-old would be able to use their GLWB rider to take an $11,250 withdrawal from their variable annuity annually.

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Pros and cons of a GLWB rider

Guaranteed lifetime withdrawal benefits may help to protect your income in retirement, but this rider also has tradeoffs.


This feature provides a guaranteed annual withdrawal amount regardless of investment performance, which may reduce the risk associated with a variable annuity. Positive market performance and the step-up feature may increase your guaranteed annual withdrawal amount in the future.

If you want exposure to the long-term growth potential of the market with a variable annuity but also like the idea of income protection, a variable annuity with a GLWB may be a good choice.


The main drawback is that they aren't free. The cost is typically between 1% and 3% of the benefit base each year.

If you need to withdraw more money in any year than your guaranteed annual withdrawal amount, your future withdrawals may be decreased.

Should you buy a variable annuity with a GLWB rider?

Is a GLWB rider the best choice for you? That depends on your needs and how much you value the security it can provide. It may be the right choice, especially if you want to better secure your retirement income streams.

If you'd like support navigating these riders, connect with a local financial advisor. A financial advisor can partner with you and provide guidance on your retirement planning needs, and they can help you learn more about annuities, the available rider options, and what may work best for you and your family.

Hypothetical examples are for illustrative purposes. May not be representative of actual results.

Riders are optional and available for an additional cost. 

Guarantees based on the financial strength and claims paying ability of the insurance company.

Contracts have exclusions, limitations and terms under which the benefits may be reduced, or the contract may be discontinued. For costs and complete details of coverage, contact your licensed insurance agent/producer.

Past performance is not necessarily indicative of future results.

This web page provides general annuities information. It does not contain information specific to a Thrivent financial product. If you are looking for information specific to a Thrivent financial product or your existing annuity contract, please log in and refer to your contract or prospectus document or visit our annuities product web page.

Investing involves risk, including the possible loss of principal. The prospectus and summary prospectuses of the variable annuity contract and underlying investment options contain information on investment objectives, risks, charges and expenses, which investors should read carefully and consider before investing.

Annuities are intended to be long term, particularly for retirement. Product availability and features may vary by state.