BMO offers guaranteed retirement income product

BMO has announced the launch of a new guaranteed income product aimed at clients aged 55 and up. The BMO Lifetime Cash Flow product bank deposit backed by BMO and is fully protected against market volatility.

The initial deposit (minimum $5,000) provides exposure to a portfolio of BMO Mutual Funds which is rebalanced annually to a progressively more conservative mix of funds over time.

After ten years the investor receives guaranteed cash payments equal to 6% per year, payable monthly, based on the initial deposit. This return of capital continues for the next 15 years, after which time the client continues to receive 6% interest income (based on the amount of the initial deposit) paid by the Bank of Montreal.

This payment continues for the rest of the individual’s life or as long as they hold the product. Any remaining portfolio value will be transferred to the estate upon death.

“With access to employer sponsored pension plans becoming less common, there is a real need for Canadians to re-think where their retirement income will come from,” said Caroline Dabu, vice-president and head of retirement market group, BMO Financial Group. “Having an income plan in place is essential to ensuring a comfortable retirement that’s free of worry.”

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.