The buyer of the guaranteed-minimum annuity does not have that option at least not with the $226,090 in the imaginary account.
Jeffrey Voudrie, a fee-only financial adviser at Legacy Planning Group in Johnson City, Tenn., is skeptical of the guaranteed-minimum annuity policies.
"They could require people to secure a minimum level of annuity income, perhaps £6,000 a year, and then give them the freedom to do what they like with the rest; or they could impose new drawdown income rules to ensure people couldn't run down all their retirement funds," says Tom McPhail from IFA Hargreaves Lansdown.
They've also been clobbered by promises they made to pay variable annuity holders minimum returns in the event that stocks fared badly.
MetLife has cut expenses and introduced products like variable annuities with minimum income guarantees to increase profit.
Whether the economy is good or bad, an annuity pays a minimum amount of income every month.
"This annuity has a guaranteed minimum income for life of 5%!" One of the hottest products among brokers over the last few years have been so-called "guaranteed minimum income benefits," sometimes sold as "guaranteed income for life" annuities.
But the difference between United Technologies' lifetime income strategy and more traditional 401(k) investment options is that about midcareer, the worker's savings are gradually shifted into variable annuities that guarantee a minimum level of income for life, starting at retirement.
Many variable annuity products associated with guaranteed minimum withdrawal benefit (GMWB) or its lifelong version, a guaranteed lifelong withdrawal benefit (GLWB), have enjoyed great market success in the United States and Asia.
The guaranteed-minimum-income benefit promises to base variable annuity payouts on the assumption that accounts grow 5% to 6% a year, compounded, even if the underlying investments fare far worse.
