what is a guaranteed minimum withdrawal benefit gmwb 
a guaranteed minimum withdrawal benefit gmwb is a type of rider or contract attached to some annuity insurance policies it guarantees the policyholder a steady stream of annual withdrawals via the return of all premiums paid into the contract regardless of an investment s performance through a series of annual withdrawals a gmwb is unlike a guaranteed minimum income benefit gmib where the latter offers a payout of specified minimum periodic income after a waiting period regardless of the variable annuity s investment performance understanding guaranteed minimum withdrawal benefit gmwb guaranteed minimum withdrawal benefit gmwb riders are available for some fixed annuity and variable annuity products during market downturns the policyholder or annuitant can withdraw a maximum percentage of their entire investments in the annuity annual maximum percentages available for withdrawal vary with contracts but are usually between 5 and 10 of the initial investment amount until reaching the depletion of the total initial investment the annuitant may continue to receive income during the withdrawal period a gmwb protects annuitants against investment losses without losing the benefit of upside gain for example suppose that jamie s initial investment was 100 000 but because of downturns in the economy that investment is now only worth 85 000 since jamie had purchased a guaranteed minimum withdrawal benefit with a rate of 10 she will be able to activate the rider contract to withdraw a certain percentage each year 8 500 in this case until she recovers the entire 100 000 initial investment in some cases gmwb riders include the ability to withdraw higher amounts when the market is booming and the annuity fund is growing using these riders the annuitant may potentially withdraw income higher than the maximum investment revisiting the example above say the initial investment is now worth 150 000 if jamie s rider includes a clause where she may realize 2 of the profits earned she might withdraw more than the annual 8 500 this scenario is applicable if her rider included the ability to adjust to favorable market trends 