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Choosing a less stressful RRSP strategy

Ask any Canadian these days to name their number one concern regarding their retirement savings plan and they'll likely say security.  Since the start of the global financial crisis and subsequent recession, people are looking for reliable ways to grow their nest egg.


One option is the Guaranteed Lifetime Withdrawal Benefit (GLWB) product. It is an investment solution that works like a mutual fund and offers guarantees.


How does the GLWB make retirement less stressful?

Deposits are divided across a number of funds to provide a balanced growth potential. This product offers a feature that will pay the contract holder a guaranteed and predictable retirement income for life, based on the age at which the first withdrawal is made. This means that investors can choose when to start making withdrawals, based on the age they think will be best for them while aiming to maximize the guaranteed income they would like to receive. In some cases, it can start as early as age 45.


What is a GLWB bonus?

The bonus will be added to the protected value used to calculate the investor's guaranteed retirement income every year provided no withdrawals are made. With this, the periodic income investors will receive at retirement will grow more quickly.


Who should buy this product?

The GLWB is ideal for anyone wanting to reduce market-related risk and volatility. The product is designed to grow your investment in both good and bad times. If the market goes up, so does your investment; however if the market goes down, you will not lose any accumulated gains for investment purposes. The GLWB is ideal for those who don't have a pension, because it provides income for life and potential market growth. 


Where can I find more information?

Your financial advisor will be able to provide you answers to your questions since they'll have a solid understanding of your retirement and personal priorities.


Submitted By:

Melissa MacQuarrie, CLU, BBA

Partner/Financial Advisor – Love & Persson Group