When you are preparing to retire, you will convert a portion of the funds in your MMBB investment accounts into an annuity.
You will “cash in” shares of the funds in which you are currently invested and use those funds to “purchase” shares in the Annuity Fund.
Assets which you do not convert remain invested in the MMBB investment funds that you designate. You can convert them into an additional annuity later, take a partial or full withdrawal or take a loan from those funds.
How your Annuity units are calculated
When you convert your account into an annuity, you are given a certain number of annuity units. The number of units assigned to you is determined by several factors:
The number of annuity units remains unchanged during your lifetime unless you convert investments from another fund to create another annuity. They may also change in the case of a joint annuity. For example, if one party in a joint annuity dies, the number of units may decrease depending upon the form of annuity payment selected.
Types of annuity options available
When you are preparing to retire there are several options you can select regarding your retirement investment account. You can:
Joint Annuity Options
The Ten Year Guarantee
All MMBB annuities have a built-in guarantee of 120 monthly or ten years of payments. You can choose to waive this guarantee.
The guarantee ensures that you and your joint annuitant (if applicable) will receive a minimum of ten years of income from your annuity if you and your joint annuitant die during the first 10 years of your annuity. The value of the remaining payments in the 10-year period can be either distributed to your beneficiary as a complete settlement or paid out in the form of an annuity for the remaining # of months. If this option is chosen, the amount of these payments would be subject to change each January based on the annual payout value. The ten year period begins when you start receiving annuity income. If you or your spouse lives beyond the 120 month period, your annuity income will continue for as long as each of you lives.
This guarantee is not dependent upon the type of annuity you choose. It applies for both the single-life and joint/survivorship annuities. MMBB strongly urges members to keep the 10-year guarantee. In most cases the decision to waive this guarantee will add less than 1% additional income to a joint annuity and slightly more than 1% to a single-life annuity.
When you are preparing to retire, you will receive estimates of your monthly income with and without the guarantee so you can made a comparison.