Guaranteed Minimum Withdrawal Benefit Plans

Guaranteed Minimum Withdrawal Benefit Plans (GMWB) provide a minimum guaranteed retirement income that will last for life regardless of the performance of the underlying investment. It further offers the opportunity to benefit from market growth and allows you the flexibility to potentially lock-in higher guaranteed income in the future or take additional income advances. These plans are offered by several insurance companies through their investment funds division.

GMWB plans are ideally tailored for:

Low Risk Investors (pre-retirees) who are seeking some upside potential from investing in the market but are attentive to downside protection.

Income-oriented investors (retirees) who want a sustainable income for life to cover all or a portion of their fixed expenses in retirement.

The Retirement Risk Zone

Retirement risk zone

If you have retirement assets invested in the markets, the time period just before and just after retirement can pose the greatest risk to your portfolio’s ability to provide you and your spouse a sustainable income for life.

The Investment Process

You have a variety of funds to choose from with different risk characteristics from bond funds to balanced funds. We typically recommend you choose the fund(s) with the highest growth potential due to the guarantees of the plan itself and the guarantee fees that do place mathematical limitations on potential returns. We normally view an allocation to the GMWB plan as a portion of your bond/cash component of your overall portfolio.

Key Features
  • 5% Annual Income Base/Benefit Bonus in every year no withdrawals are made.
  • 100% Death Benefit Guarantee of the principal less any withdrawals.
  • Triennial Resets: Death Benefit Guarantee, Income Base and Base Bonus are automatically reset every three years.
  • Creates the potential for higher locked-in guarantees.
  • Low Minimum investment of $10,000.
  • Non-Registered and Registered Plans such as RRSPs, RRIFs, LIRAs, LRIFS
  • Potential for higher growth due to the underlying investment fund performance.
  • Retirement Income Privileges: You can choose to discontinue your income payments and then resume anytime.
  • You can liquidate the fair market value of your portfolio anytime. (subject to any applicable redemption fees)
  • Single & Joint tiered guaranteed Lifetime Withdrawal Amount (LWA) options starting at age 55.