You can reduce the risk of outliving your assets in retirement by annuitizing your variable annuity. We'll show you how that works.
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.
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
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.
Choose the payment option
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.
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
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.
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.
Our licensed annuity specialists are here to help.
Monday through Friday
8 a.m. to 8 p.m., Eastern time
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INVEST IN THE VANGUARD VARIABLE ANNUITY
Choose from a diverse lineup of stock, bond, and money market portfolios.
The money you have invested in the major asset classes—stocks, bonds, and short-term or "cash" investments.
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.
Income you can receive from your annuity. The annuity's interest rate is in effect for a specific period of time.
Generally, the person who receives income payments from the annuity. The annuitant's age is used to calculate the maximum annual withdrawal amount.
A person or organization designated to receive the proceeds of an annuity contract after the owner dies.
A general rise in the prices of goods and services.
The average cost of the basic necessities for everyday living, such as food, shelter, clothing, and health care.
An investment option—offered by an annuity—that holds a range of underlying investments.