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Lifetime Income Benefit Formula:
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A Lifetime Income Benefit Rider is an optional annuity or insurance feature that guarantees a stream of income for life, regardless of market performance. It provides financial security by ensuring you won't outlive your retirement income.
The calculator uses the simple formula:
Where:
Explanation: The rider guarantees a specific percentage withdrawal from your benefit base, which may be higher than your actual account value in some cases.
Details: Accurate income calculation helps in retirement planning, ensuring you understand how much guaranteed income you can expect from your annuity or insurance product with this rider.
Tips: Enter your benefit base amount and the withdrawal percentage specified in your contract. Both values must be positive numbers.
Q1: What is the difference between account value and benefit base?
A: The account value is the actual current value of your investment, while the benefit base is a protected value used specifically for calculating income payments, which may be higher than your actual account value.
Q2: Can the withdrawal percentage change?
A: The percentage is typically fixed based on your age at the time of first withdrawal and the specific rider terms, but it's important to review your contract details.
Q3: Are there fees associated with this rider?
A: Yes, lifetime income benefit riders typically have annual fees, usually calculated as a percentage of the benefit base. Check your contract for specific fee information.
Q4: When can I start taking income payments?
A: This varies by contract but is typically available after a specified waiting period or once you reach a certain age (often 59½ or older).
Q5: Is the income payment guaranteed for life?
A: Yes, that's the primary benefit of this rider - it guarantees income payments for your lifetime, regardless of how long you live or market performance.