Skip to main content

Vanguard will be transitioning the client service and account administration for the Vanguard Variable Annuity to Transamerica, the issuer of the annuity, by December 2020.

What's annuitization?

You can reduce the risk of outliving your assets in retirement by annuitizing your variable annuity. We'll show you how that works.

Annuitization basics

When you choose to annuitize, the value of your Vanguard Variable Annuity contract is converted to regular income payments, which can provide you with the security of income you can't outlive. The Vanguard Variable Annuity is issued by Transamerica Premier Life Insurance Company and, in New York State only, by Transamerica Financial Life Insurance Company.

To create the guaranteed income stream, the assets invested in your annuity are permanently transferred to an insurance company. The insurance company, in turn, uses your assets to guarantee the income payments.*

The Vanguard Variable Annuity offers you flexibility in scheduling these payments, and your payments can be either fixed, variable, or a combination of both.

Go in-depth ... Read our brochure to learn more about your options.

Questions to ask when considering annuitization

Expand all

Collapse all

Who should consider annuitization?

Annuitization can be suitable if you want to guarantee yourself—and someone else, if you wish—an income stream for life. You can have more confidence in your financial situation knowing that you may be less likely to outlive your money.

Before investing in the Vanguard Variable Annuity—and choosing to annuitize it for retirement income—consider your needs. This scenario might be appropriate if you:

  • Think you need guaranteed income beyond Social Security or a pension.
  • Place a higher priority on spending in retirement than the preservation of assets for your heirs.
  • Are willing to surrender control of your assets (all or a portion) at a certain point.

When is the best time to annuitize?

Everyone's situation is unique. The best time to annuitize could be at retirement or whenever you need to replace other sources of income.

Generally, the longer you delay annuitizing your contract, the fewer payments you'll receive and, therefore, the larger each payment will be. Conversely, if you begin receiving payments at a younger age, the payments will be smaller, but they'll last as long as you live (or for the period of time you choose).*

Can I change my mind after annuitizing?

No. The decision to annuitize is final. And once you choose an annuity payment option, that decision is also final.

When you annuitize, the accumulated value of your contract is converted to an income stream, and you won't be able to make withdrawals outside of your selected payment option. It's a good idea to have other funds available to cover unexpected expenses.

How much income can I receive by annuitizing?

The income you receive depends on the amount you convert, your life expectancy, interest rates, and the payment option you choose.

Customize income payments to meet your goals

By choosing the payment option and calculation method that's right for you when you annuitize your Vanguard Variable Annuity, you can tailor your income stream to meet your needs and, if you wish, those of others.

Expand all

Collapse all

Choose the payment option

Life annuity

If you choose yourself as the annuitant, you'll be guaranteed income for as long as you live. Payments will stop upon your passing, and nothing will be paid out to your heirs.

Joint and last survivor annuity

If there are 2 annuitants, such as you and your spouse, payments will continue for as long as either of you is living. The survivor, or joint annuitant, can receive payments that are 100%, 75%, or 50% of the original amount.

Life annuity with period certain

You'll receive payments for life, with a minimum guaranteed payment period ranging from 10 to 30 years. If you die before the period ends, your beneficiary receives the remaining payments.

Period-certain annuity

You'll receive payments for a specific period ranging from 10 to 30 years. If you die before the period ends, your beneficiary receives the remaining payments. This option is available only with fixed payments.

Decide how your payments will be calculated

Fixed payments

Receive the same payment amount for the length of the payment period without adjustments for inflation. If you choose this option, your payments may not keep up with the cost of living or inflation.

Variable payments

Allocate your assets among a diverse range of investment portfolios. The first payment will be based on an assumed interest rate (AIR) of 4%. Subsequent payments will vary depending on how your investments perform. You can change your allocation, within certain limitations, without tax consequences.

Combination payments

Combine the predictability of the fixed option with the growth potential of the variable option by allocating part of your assets to each.

How annuities work at Vanguard

It's always a good time to discuss your options with us.

Call our unbiased annuity specialists at 800-853-7107 to discuss your distribution options. We can help you decide whether annuitization is right for you, walk you through the entire process, and help you complete the necessary paperwork.

Get started

Our licensed annuity specialists are here to help.

Call 800-853-7107

Monday through Friday
8 a.m. to 8 p.m., Eastern time

Save more for retirement

INVEST IN THE VANGUARD VARIABLE ANNUITY

Choose from a diverse lineup of stock, bond, and money market portfolios.


Get complete portfolio management

We can custom-develop and implement your financial plan, giving you greater confidence that you're doing all you can to reach your goals.

Retirement: The basics

Balancing your retirement goals can be challenging, but we can help you find solutions that work for you.

See the benefits of investing more at Vanguard

As your assets grow with us, you'll gain access to personal attention, lower costs, and more.

REFERENCE CONTENT

Layer opened.

Assets

The money you have invested in the major asset classes—stocks, bonds, and short-term or "cash" investments.

Layer opened.

Accumulated value

An amount equal to the initial purchase amount plus any additional premium payments received—less applicable fees, partial withdrawals, and premium taxes. The value also takes into account any changes in the value of the selected investments.

Layer opened.

Interest rate

Income you can receive from your annuity. The annuity's interest rate is in effect for a specific period of time.

Layer opened.

Annuitant

Generally, the person who receives income payments from the annuity. The annuitant's age is used to calculate the maximum annual withdrawal amount.

Layer opened.

Beneficiary

A person or organization designated to receive the proceeds of an annuity contract after the owner dies.

Layer opened.

Inflation

A general rise in the prices of goods and services.

Layer opened.

Cost of living

The average cost of the basic necessities for everyday living, such as food, shelter, clothing, and health care.

Layer opened.

Portfolio

An investment option—offered by an annuity—that holds a range of underlying investments.