The Riders That Actually Matter

A rider is an add-on feature to an annuity contract. Some are worth their fee. Some absolutely are not. Here are the ones that matter. Guaranteed Lifetime Withdrawal Benefit (GLWB). Also called an income rider. This is the one that lets you turn on a paycheck at a future age and keep receiving it for the rest of your life, even if the account balance runs out. This is what makes an annuity function like a pension. The fee is typically 0.6% to 1.5% per year. The benefit is that your future income is calculated on a "benefit base" that often grows at a guaranteed rate (say 7% per year for a set number of years), whether or not your actual account balance grows that much. Example: put in $100,000, benefit base grows at 7% for 10 years, that base becomes ~$196,000. At age 75, you turn on income at a 5.5% withdrawal rate. That is roughly $10,800 a year, for life, guaranteed. This is the rider most people are actually buying an annuity for. Long-Term Care Rider. Some newer annuities double or triple your monthly income if you cannot perform two of the six activities of daily living (bathing, dressing, eating, transferring, toileting, continence). This is a huge benefit. Long-term care costs in 2026 average around $10,000 a month for a nursing home. If your annuity was paying you $2,500 a month for retirement, and it doubles or triples when you need care, you have real protection.

Some annuities offer this as a no-cost feature. Some charge for it. Either way, if you don't already have long-term care insurance, this is one of the most important riders to consider. Death Benefit Rider. Guarantees a minimum amount to your beneficiary when you die, even if your account balance is lower. Useful if you want to leave the annuity's remaining value to family and you're worried about market losses eating into it before you pass. Fee is typically 0.25% to 1% per year. Only worth it if legacy is a specific goal. Wellness Rider. A newer feature on some contracts. No cost. It waives surrender charges if you need the money for a serious medical event, are diagnosed with a terminal illness, or need long-term care. If your annuity offers this at no cost, take it. Enhanced Death Benefit. Guarantees your beneficiary gets the highest anniversary value of the account, not just the current value. Small cost. Nice feature if you can get it cheap. The Rider Rule: Don't pay for a rider you will never use. Don't skip one that solves a real problem in your plan. If the agent recommends a rider that adds 1% a year to your cost, ask them exactly what problem it solves for you. If they can't give you a straight answer in one sentence, you probably don't need it.

PART III

WHAT NOBODY TELLS YOU

Every one of these chapters covers something the agent selling the annuity should be telling you, and usually isn't. Read this

part twice.