Lifetime withdrawal benefit is an annuity feature that allows the owner to withdraw a specified percentage of a benefit base each year for life, even if the account value falls to zero. It is typically provided through a guaranteed lifetime withdrawal benefit rider on a variable or fixed indexed annuity. The withdrawal percentage often depends on the age at which withdrawals begin and may increase if income is deferred. Unlike annuitization, lifetime withdrawals usually allow the owner to retain control of the contract value and, in some cases, stop and start withdrawals. The benefit is designed to offer lifetime income flexibility while maintaining some access to principal.

In day to day retirement planning, advisors recommend lifetime withdrawal benefits for clients who want guarantees but dislike the perceived finality of traditional annuitization. They demonstrate how the benefit base grows during deferral and how starting withdrawals at different ages changes the guaranteed income amount. Advisors also clarify that excess withdrawals above the allowed percentage can reduce future guarantees and that rider charges apply regardless of market performance. They help clients coordinate withdrawals with other income sources and required minimum distributions. When markets perform well, account value may remain intact, providing residual value for heirs; when markets perform poorly, the guarantee ensures minimum lifetime income. By understanding lifetime withdrawal benefits, producers can present nuanced strategies that blend security, control, and potential growth within modern annuity designs.