Guaranteed income for life through the Vanguard Variable Annuity

What you'll get with the GLWB

Flexibility. You can:

  • Start, stop, or skip withdrawals at any time.
  • Make additional withdrawals (as long as you don't exceed your maximum annual withdrawal amount).
  • Receive guaranteed payments for life even if withdrawals ultimately deplete the accumulated value.

Insurance guarantee. The Vanguard Variable Annuity with the optional GLWB rider is issued by Transamerica Premier Life Insurance Company and, in New York State only, by Transamerica Financial Life Insurance Company. Both companies have high ratings for financial strength from leading independent rating agencies and stand behind the guarantee of payments for life.**

Your lifetime withdrawals will be protected against any investment losses resulting from an economic downturn. They'll never go down, even if the market drops significantly. And when the market rises, your annual withdrawal amount can rise along with it.

Growth potential and market protection.* Your lifetime withdrawals can increase if you have gains in your designated investments. Gains can increase your total withdrawal base (TWB) and, hence, the amount of your benefit. If there are gains, on your rider anniversary, your TWB automatically increases. During periods of market decline, you can have confidence that your available withdrawal amount won't decrease, unless you exceed your maximum annual withdrawal amount (MAWA).†

GLWB chart 

 
   
 

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If you'd like to learn more about how you could benefit from the Vanguard Variable Annuity with the Guaranteed Lifetime Withdrawal Benefit, call us at 800-357-4720 to speak with one of our licensed, noncommissioned annuity specialists.

 
     

How the GLWB works

Purchasing the rider

You can add the GLWB rider to a Vanguard Variable Annuity anytime until age 90. You'll pay an annual fee equal to 1.20% of your Total Withdrawal Base.††

Both nonqualified (after-tax) and qualified (pre-tax) assets can be invested in the GLWB. You can transfer assets from an IRA or 401(k) to the Vanguard Variable Annuity, and then use the GLWB rider to take withdrawals for the rest of your life, even if your original investment is depleted.

You'll designate your GLWB investment, choosing from three options from Vanguard:

  • Balanced Portfolio (60%–70% stocks/30%–40% bonds)
  • Moderate Allocation Portfolio (60% stocks/40% bonds)
  • Conservative Allocation Portfolio (40% stocks/60% bonds)

Taking withdrawals from the GLWB

You can wait and allow the money in your designated investments the opportunity to grow, or you can elect to start GLWB withdrawals following the rider anniversary after the annuitant turns age 59.

The amount that you can withdraw each year will be determined by your total withdrawal base (TWB) and your age when you start taking withdrawals. On the rider effective date, your TWB is set, based on the accumulated value in your designated investments. On each rider anniversary, your TWB will be the greater of your current TWB or the accumulated value in your designated investments.

How withdrawals work

To figure your maximum annual withdrawal amount each year, multiply your withdrawal percentage by your TWB. The table below summarizes the allowable withdrawal percentages based on the age of the annuitant for both the single and joint options.

Annual withdrawal percentages

Age at first withdrawal

Single life rider

Joint life rider

59–64 4.00% 3.50%
65–69 5.00% 4.50%
70–79 5.00% 4.50%
80+ 6.00% 5.50%

If you choose a joint life rider, the withdrawal percentages are based on the younger of the annuitant or the annuitant's spouse when withdrawals begin.

More about the Vanguard Variable Annuity with the GLWB

Who should consider this annuity?
Investors who want guaranteed income for life, the potential for investment gains, and control of their assets.

How will my money be invested?
In your choice of one or more of the three designated Vanguard investment portfolios.

What are the costs?
In addition to the GLWB annual rider fee of 1.20%, the Vanguard Variable Annuity has an average annual cost of 0.57%, which is more than 70% below the industry average.††

Will I still have access to my investment?
Yes, shares of the principal can be redeemed at any time, but changes in the share balance can affect future payouts.†

What guarantee do I have for my annuity contract?
The guarantee is subject to the claims-paying ability of the issuer, Transamerica Premier Life Insurance Company and, in New York State only, Transamerica Financial Life Insurance Company, both of which are highly rated for financial strength.

Are payments taxed?
Yes, generally, withdrawals from annuities are taxed. Please consult a tax advisor for information on how annuity taxation applies to your situation.

*Product guarantees are subject to the claims-paying ability of the issuing insurance company.

**Ratings of the insurance company don't apply to the Vanguard portfolios and don't provide protection against investment risk.

†Any withdrawal before age 59½ could be subject to a 10% federal penalty tax. Excess withdrawals are the withdrawals greater than your MAWA and may reduce or eliminate the benefit provided by the GLWB rider.

††Source: Morningstar, Inc., as of December 2013. The Vanguard Variable Annuity has an average expense ratio of 0.57%, versus the annuity industry average of 2.27%; excludes fees for optional riders. The rider fee for future premium payments into the designated GLWB investments could be higher or lower, but not more than the maximum of 2.0%. Actual expense ratios for the Vanguard Variable Annuity range from 0.46% to 0.77%, depending on the investment allocation. The expense ratio includes an administrative fee of 0.10% and a mortality and expense risk fee of 0.195%. The expense ratio excludes additional fees that would apply if the Return of Premium Death Benefit Rider or Guaranteed Lifetime Withdrawal Benefit Rider is elected. In addition, contracts with balances under $25,000 are subject to a $25 annual maintenance fee.

Investments in bond funds are subject to interest rate, credit, and inflation risk.

Variable annuities are long-term investment vehicles designed for retirement purposes. They contain underlying investment portfolios that are subject to investment risk, including the possible loss of the money you invest.

The Vanguard Variable Annuity is a flexible-premium variable annuity issued by Transamerica Premier Life Insurance Company, Cedar Rapids, Iowa (NAIC No. 66281), and in New York State only, by Transamerica Financial Life Insurance Company, Harrison, New York (NAIC No. 70688). Form No. VVAP U 1101 (in Florida, Form No. VVAP U 1101 (FL), in Oregon, Form No. VVAP U 1101 (OR)(R), and in New York, VVA NY 0208(R13)). GLWB Rider Form No. RGMB 43 0811 (in Florida, RGMB 43 0811 (SI)(FL), RGMB 43 0811 (JT)(FL), in Oregon, RGMB 43 0811 (SI)(OR), RGMB 43 0811 (JT)(OR), and in New York, RGMB 43 0811 (SI)(NY)(REV), RGMB 43 0811 (JT)(NY)(REV)). Return of Premium Death Benefit Rider Form No. VVA RP 0811 (in Florida, VVA RP 0811 (FL), in Oregon, VVA RP 0811 (OR), and in New York, VVA RP 0811 (NY)(REV)), without agent representation. Policy and rider form numbers may vary by state and may not be available in all states. The Vanguard Group administers the Vanguard Variable Annuity for the issuer. Its variable annuity and investment costs rank among the lowest in the industry, according to Morningstar, Inc., December 2013. The Vanguard Group, Transamerica Premier Life Insurance Company, and Transamerica Financial Life Insurance Company do not provide tax advice. Investors are encouraged to consult a tax advisor for information on how annuity taxation applies to their individual situations.

On July 31, 2014, Monumental Life Insurance Company changed its name to Transamerica Premier Life Insurance Company. The name change may not be effective in all states at the time of publication.

For federal tax purposes, same-sex married individuals are recognized as "spouses." The IRS has adopted a rule providing that the term "spouse" doesn't include an individual who has entered into a registered domestic partnership, civil union, or other similar relationship. The status of these relationships for state purposes may vary based on the applicable state law. Vanguard Variable Annuity contracts will be administered consistently with the IRS rulings. Investors are encouraged to consult with a tax advisor prior to purchasing an annuity to discuss how exercising spousal continuation benefits under this contract or any riders will affect federal and state tax filings. Please refer to the Vanguard Variable Annuity prospectus for more information.

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