Submitted by Anonymous on
The Vanguard variable annuity comes with an optional guaranteed lifetime withdrawal benefit.
Living benefits have been very popular and most people who buy variable annuities choose to include a living benefit.
The problem is that these optional features can be very expensive--often in the range of 1.5 percent.
Also, living benefit features have become less attractive since the financial crisis. Many insurance companies got burned because the living benefits they offered to be competitive were too rich and not priced appropriately.
Lower rates and higher costs are the result.
Vanguard's GLWB costs less than 1 percent (I think it is around .95 percent).
This is great and a huge plus for financial services consumers.
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