GMWB is an investment option that annuitants can purchase to protect their retirement savings against downside market risk. Choosing a GMWB guarantees the annuitants a certain safety net. Without a GMWB we are often left at the mercy of the market, without any real security. “Waiting it out” may not be an option for older investors with shorter time horizons. GMWBs provide protection against market risk, longevity risk (outliving your money) and are an alternative to GICs which may only pay 1 or 2%.
The best thing about the guaranteed minimum withdrawal model is rather obvious; you receive a guaranteed minimum income from your retirement savings each year, starting as early as age 50 for as long as you live. This means that the annuitants are protected against the biggest downside of any investment, which is of course losing money. In addition to the withdrawal benefit, the owner is guaranteed 5% in growth each year prior to taking income. Additionally, every 3 years, a reset will occur if the market value is higher than the original investment, further increasing income when it is time to withdraw.
Guaranteed Minimum Withdrawal Benefit Vancouver is one of the best and safest options for people who are either approaching or in retirement with a need for income.