The General Accounting Office was asked to explore the risks involved with two types of annuities that offer guaranteed lifetime withdrawals. It found that one of the products it investigated was not regulated well at the state level and could pose a risk to consumers.

Variable annuities with guaranteed lifetime withdrawal benefits (VA/GLWB ) and contingent deferred annuities (CDA) both provide consumers with access to investment assets and the guarantee of lifetime income, but while VA/GLWB assets are held in a separate account of the insurer for the benefit of the annuity purchaser, the assets covered by a CDA are generally held in an investment account owned by the CDA purchaser.

One risk associated with these products, according to the GAO, is that they are complex and require consumers to make multiple important decisions. For instance, consumers might purchase an unsuitable product or make withdrawal decisions that could negatively affect their potential benefits.