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This paper offers a financial economic perspective on the optimal time (andage) at which the owner of a Variable Annuity (VA) policy with a GuaranteedLiving Withdrawal Benefit (GLWB) rider should initiate guaranteed lifetimeincome payments. We abstract from utility, bequest and consumption preferenceissues by treating the VA as liquid and tradable. This allows us to use anAmerican option pricing framework to derive a so-called optimal initiationregion. Our main practical finding is that given current design parameters inwhich volatility (asset allocation) is restricted to less than 20%, whileguaranteed payout rates (GPR) as well as bonus (roll-up) rates are less than5%, GLWBs that are in-the-money should be turned on by the late 50s andcertainly the early 60s. The exception to the rule is when a non-constant GPRis about to increase (soon) to a higher age band, in which case the optimalpolicy is to wait until the new GPR is hit and then initiate immediately. Also,to offer a different perspective, we invert the model and solve for the bonus(roll-up) rate that is required to justify delaying initiation at any age. Wefind that the required bonus is quite high and more than what is currentlypromised by existing products. Our methodology and results should be ofinterest to researchers as well as to the individuals that collectively haveover \$1 USD trillion in aggregate invested in these products. We conclude bysuggesting that much of the non-initiation at older age is irrational (whichobviously benefits the insurance industry.)

Optimal initiation of a GLWB in a variable annuity: no arbitrage approach