Schwab Launches Retirement Income Variable Annuity™, Expanding Retirement
Income Solutions for Investors
New Survey Finds Investors Want Steady Income in Retirement But Are Confused
SAN FRANCISCO -- February 6, 2013
Investors seeking an easy-to-understand, low-cost retirement funding option
that can generate guaranteed income for life can now consider the new Schwab
Retirement Income Variable Annuity (SRIVA), Charles Schwab announced today.
The new Schwab Retirement Income Variable Annuity, featuring an optional
guaranteed lifetime withdrawal benefit (GLWB), was developed for investors
seeking a low-cost, easy-to-understand variable annuity that offers a
guaranteed income stream, investment diversification, and professional
guidance. SRIVA’s guarantees are backed by Pacific Life, one of America’s
leading insurance providers.
Investors who select the SRIVA with the GLWB option are purchasing additional
protection to ensure a minimum level of income for life, regardless of how the
markets perform. With the GLWB, the income stream is protected in the event of
a market downturn, even if the underlying portfolio value of the variable
annuity drops to zero.
“For many investors, knowing the amount of money that is reliably being
generated every month - regardless of the market’s impact - is invaluable,”
says Tina Valenzuela, vice president of insurance services at Charles Schwab.
“Variable annuities can be a great fit for addressing these concerns.
Unfortunately, many annuities with a GLWB can be complicated and expensive.
We’re thrilled that we’re able to offer a variable annuity with an income
guarantee option that is understandable, flexible and accessible.”
With a minimum investment of $50,000, investors can purchase the Schwab
Retirement Income Variable Annuity as well as an optional Guaranteed Lifetime
Withdrawal Benefit rider. Benefits include:
*Tax-deferred growth potential. Retirement savings grow tax-free until
withdrawal at retirement.
*Guaranteed income. In addition to annuitization, the optional GLWB rider
allows an investor to secure an annual lifetime income stream equal to
five percent of a protected payment base that locks in the highest
contract anniversary value achieved since purchase of the rider.
*Pricing. The base fee is 60 basis points – less than half of the industry
average of 134 basis points, according to Morningstar^1 – and each of the
underlying portfolios has an investment expense ratio of 80 basis points.
The GLWB rider can be added at any time until age 85 for 80 basis points,
or for 100 basis points for a joint GLWB. There are no hidden charges or
*Investments and access. Schwab clients have three simple portfolios to
choose from – balanced, balanced with growth and growth – each is broadly
diversified and professionally managed by Charles Schwab Investment
Management, Inc. If an investor’s needs change over time, he or she can
transfer among these three investment choices, tax-free. With the GLWB
option, investors can also access their annuity assets and withdraw them
for emergencies or unexpected expenses^2, even while they are taking
lifetime income (investors should be aware that the GWLB is not a contract
value and is not available for withdrawal like a cash value and that their
actual contract value and death benefit will deplete with each
*Professional guidance. By sitting down with any of Schwab’s 1200+
financial consultants to talk about their retirement planning options,
investors get tailored advice and professional help in determining whether
the SRIVA or other annuity options are right for their retirement income
When it Comes to Annuities, Confusion Reigns
Although Schwab’s latest retirement survey found that a majority of Americans
(84 percent) want their savings to produce a steady stream of income in
retirement, most investors don’t understand that annuities can be a solution.
Valenzuela points out that the survey found that close to half (44 percent) of
Americans grade themselves a ‘D’ or ‘F’ on their annuities awareness.
Half of Americans say they don’t understand what an annuity is and seventeen
percent say their initial reaction to the word “annuity” is “complicated.”
There’s also an uncertainty about who to turn to for advice on the product,
although survey respondents said they are most likely to turn to a financial
advisor or planner (34 percent) for more information on annuities.
“The instrumental role that annuities can play in a retirement income
portfolio makes it essential for investors to better understand how they
potentially fit into their investment plans,” notes Valenzuela. “Our survey
shows that most investors lack a basic understanding of annuities and that
more education is needed.”
The Schwab Retirement Income Variable Annuity is available through Schwab
branches nationwide. Additional information about the Schwab Retirement Income
Variable Annuity is available at schwab.com/annuities or by calling (888)
311-4889. For clear and actionable guidance on how to plan an overall income
generation strategy that fits your retirement goals, Schwab has nine
Retirement Income Fundamentals that help ease the transition from saving for
retirement to spending in retirement available at
About the Survey
The Charles Schwab Retirement Survey was conducted byKoski Research
betweenJanuary 3 and 7, 2013, using Random Digit Dialing of listed and
unlisted numbers, with 20 percent of the sample reached by cellular/mobile
phones. Quotas are set to ensure reliable and accurate representation of the
entire U.S. population ages 18 and over. Results of any sample are subject to
sampling variation. The magnitude of the variation is measurable and is
affected by the number of interviews and the level of the percentages
expressing the results. The study’s margin of error is +/- 3.1 percent.
About Charles Schwab
The Charles Schwab Corporation (NYSE:SCHW) is a leading provider of financial
services, with more than 300 offices and 8.8 million active brokerage
accounts, 1.6 million corporate retirement plan participants, 865,000 banking
accounts, and $1.95 trillion in client assets as of December 31, 2012.The
companywas ranked ‘Highest in Investor Satisfaction With Self-Directed
Services’ in the 2012 US Self-Directed Investor Satisfaction Study^SM from J.D
Power and Associates. Through its operating subsidiaries, the company provides
a full range of securities brokerage, banking, money management and financial
advisory services to individual investors and independent investment advisors.
Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC,
www.sipc.org), and affiliates offer a complete range of investment services
and products including an extensive selection of mutual funds; financial
planning and investment advice; retirement plan and equity compensation plan
services; compliance and trade monitoring solutions; referrals to independent
fee-based investment advisors; and custodial, operational and trading support
for independent, fee-based investment advisors through its Advisor Services
division. Its banking subsidiary, Charles Schwab Bank (member FDIC and an
Equal Housing Lender), provides trust and custody services, banking and
lending services and products. Investment products offered by Charles Schwab &
Co., Inc. are not insured by the FDIC, are not deposits or obligations of
Charles Schwab Bank, and are subject to investment risk, including the
possible loss of principal invested. More information is available at
www.schwab.com and www.aboutschwab.com. (0213-1179)
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Read our blog: Schwab Talk
Variable annuities are sold by prospectus only. Before purchasing a variable
annuity, you should carefully read the prospectus and consider all risks,
charges and expenses associated with the annuity, its investment objective and
its investment options. You can request a prospectus by calling 1-888-311-4887
or by visiting www.schwab.com/annuity.
The contract value of a variable annuity may be more or less than the premiums
paid and it is possible to lose money.
All guarantees under the Schwab Retirement Income Variable Annuity are subject
to the financial health and claims-paying ability of Pacific Life, not Schwab.
The Guaranteed Lifetime Withdrawal Benefit (GLWB) is an optional rider
available for an additional cost. The protected payment base is not a contract
value and is not available for withdrawal like a cash value. Your actual
contract value and death benefit will deplete with each withdrawal, though you
may continue to withdraw the specified annual protected amount for life, even
after the account value has been depleted to zero. Withdrawals in excess of
the annual protected payment amount may permanently reduce the protected
Variable annuities are long-term investment vehicles designed for retirement
purposes and offer tax deferral on potential growth; however, withdrawals
prior to age 59½ may be subject to a 10% Federal tax penalty in addition to
applicable income taxes. Variable annuities are also subject to a number of
fees including mortality and risk expense charges, administrative fees,
premium taxes, investment management fees, and charges for additional optional
features. Although there are no surrender charges on the variable annuities
offered by Schwab, such charges do apply in the early years of many contracts
The Schwab Retirement Income Variable annuity is issued by Pacific Life
Insurance Company in all states except New York and in New York by Pacific
Life & Annuity Company. The contracts are sold exclusively by Charles Schwab &
Co., Inc. (“Schwab”) through its representatives including both employees and
independent contractors and their employees (“Schwab Financial Consultants”).
Charles Schwab Investment Management, Inc. (CSIM) is the adviser for the
underlying investment options. Charles Schwab & Co., Inc. and Charles Schwab
Investment Management, Inc. are separate but affiliated companies and
subsidiaries of The Charles Schwab Corporation and are not affiliated with
Pacific Life Insurance Company or Pacific Life and Pacific Life & Annuity
The Schwab Center for Financial Research is a division of Charles Schwab &
© 2013 Charles Schwab & Co., Inc. All rights reserved.
^1 Source: 1.34% industry average base annuity fee according to a December 31,
2012 Morningstar survey of 1,925 variable annuities. This does not include
fees associated with the optional guaranteed lifetime withdrawal benefit or
underlying investment options.
^2 Tax penalties may apply prior to age 59 1/2 and withdrawals in excess of
the protected payment amount may significantly and permanently reduce your
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