Annuity Planning · Tool 9 of 12
GLWB Activation Timing
When to turn on guaranteed lifetime withdrawal income. Trade-off: wait → BB rolls up + bigger income but fewer years; start now → less per year but more years. The engine finds the NPV-maximizing age.
Optimal activation
Optimal activation age
Age 65
Annual income then
$34,000
NPV of income stream
$482,270
Activate at age 65. the BB has had 5 years to roll up. Earlier means smaller income but more years; later means bigger income but fewer years. The NPV picks the sweet spot.
NPV by activation age
$448k
$448k
$447k
$445k
$440k
$482k
$474k
$464k
$454k
$445k
$456k
$424k
$393k
$362k
$333k
$332k
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
Each bar is the present value of total income if the advisor activates GLWB at that age. The accent bar marks the optimal pick.
By activation age. table
| Age | Annual income | Cumulative | NPV |
|---|---|---|---|
| 60 | $23,850 | $667,800 | $447,524 |
| 61 | $25,200 | $680,400 | $448,390 |
| 62 | $26,550 | $690,300 | $447,384 |
| 63 | $27,900 | $697,500 | $444,600 |
| 64 | $29,250 | $702,000 | $440,125 |
| ★ 65 | $34,000 | $782,000 | $482,270 |
| 66 | $35,500 | $781,000 | $473,816 |
| 67 | $37,000 | $777,000 | $463,752 |
| 68 | $38,660 | $773,202 | $454,040 |
| 69 | $40,529 | $770,050 | $444,927 |
| 70 | $44,582 | $802,473 | $456,246 |
| 71 | $44,582 | $757,891 | $424,039 |
| 72 | $44,582 | $713,309 | $392,771 |
| 73 | $44,582 | $668,728 | $362,413 |
| 74 | $44,582 | $624,146 | $332,939 |
| 75 | $48,635 | $632,252 | $331,989 |