At age 65, Sam is ready to start taking income. He chooses the Rising Income option on a single life basis. With the Rising Income option, Sam’s initial annual payment will be $7,650. Then, each year Sam’s withdrawal percentage will increase:
Age
Benefit base
Withdrawal percentage
Annual payment
65
$150,000
x
5.10%
=
$7,650
66
$150,000
x
5.20%
=
$7,800
67
$150,000
x
5.30%
=
$7,950
68
$150,000
x
5.45%
=
$8,175
69
$150,000
x
5.65%
=
$8,475
70
$150,000
x
5.90%
=
$8,850
71
$150,000
x
6.10%
=
$9,150
72
$150,000
x
6.30%
=
$9,450
73
$150,000
x
6.55%
=
$9,825
74
$150,000
x
6.70%
=
$10,050
75
$150,000
x
6.95%
=
$10,425
76
$150,000
x
7.20%
=
$10,800
77
$150,000
x
7.40%
=
$11,100
78
$150,000
x
7.60%
=
$11,400
79
$150,000
x
7.65%
=
$11,475
80
$150,000
x
7.70%
=
$11,550
The bottom line: With the choice of this option, Sam can expect to receive an annual payment of $11,550 for life at age 80, even if his contract value reached zero. Example assumes income is based on a single life basis and no excess withdrawals are taken.
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