New Guaranteed Lifetime Income (GLI) Annuity from OMA Insurance can provide physicians with guaranteed income for life
“Live long and prosper.” Spock’s famous catchphrase from Star Trek sums up the retirement goals for most of us: a long life and enough money to enjoy it to the fullest. Yet in February 2018, the OMA conducted a survey of 1,235 of our members and found that 80 per cent of members are ‘not fully confident’ they have a financial plan that will see them through their full retirement1 – the main reason why so many physicians continue working into their 70s and 80s.
“Physicians have told us they would like to have a pension-like income when they retire,” said Preya Singh-Cushnie, director, Insurance Advisory and Information Services for OMA Insurance. “The Guaranteed Lifetime Income Annuity is designed to close the gap on their retirement income needs.”
In May 2021, the Guaranteed Lifetime Income Annuity was launched to help physicians establish guaranteed monthly retirement income, similar to a pension plan, through the Advantages Retirement Plan™.
Underwritten by Brookfield Annuity Company and available exclusively to OMA members, this unique, voluntary product offers physicians secure, predictable, monthly income throughout their retirement years.
A life annuity is a form of insurance that guarantees a set amount of regular income for as long as you live. Unlike investments such as mutual funds or term deposits, an annuity is a permanent, non-refundable financial commitment between you and an insurance company. In return for the premium you pay to purchase the annuity, the insurer guarantees you’ll receive income until you die, helping protect you from the risk of running out of money during your lifetime.
An annuity also shields you from ups and downs in the financial markets, offering you a secure income at a time of life when you want to enjoy what you’ve earned, rather than worry about managing your assets.
“Many physicians delay retirement because they’re not sure how much money they’ll have for the rest of their lives,” said Paul Forestell, president and CEO of Brookfield Annuity Company. The Guaranteed Lifetime Income Annuity provides a monthly paycheque that’s fully guaranteed by our insurance company and very flexible in the amount that the physician receives. That makes it very unique in the market. The amount the physician decides to purchase provides a base level of income they will receive every month. They can invest the rest of their assets as they see fit, with the comfort of knowing they’re getting that cheque every month.”
Another unique aspect of this offering is your ability to purchase it in regular monthly instalments. Singh-Cushnie points out that “unlike most annuities, you don’t have to purchase the Guaranteed Lifetime Income Annuity with a lump sum, upfront payment. Physicians 50 years of age and older can purchase it over time for as little as $100 a month. Our online calculator helps physicians envision what they need, save for it and realize it.”
To purchase a Guaranteed Lifetime Income Annuity, you use the funds you’ve saved in your Registered Retirement Savings Plan (RRSP) or Retirement Income Fund (RIF) as part of the Advantages Retirement Plan™. When you’re ready to retire (as early as age 60), your payments flow back to you through your RRSP or RIF, so you’re only taxed when you withdraw the funds. The Guaranteed Lifetime Income Annuity is not like mutual funds or other investments that provide a posted rate of return or can be cashed out to realize gains.
This is a lifetime commitment. Once you purchase the annuity, it’s non-refundable because the promise from the insurance company is to pay income for as long as you live,” said Vicki Stokoe, chief compliance officer at Brookfield Annuity.
“Doctors are super busy,” said Singh-Cushnie. “It’s important not to have to go chasing the next stock pick. We built this plan to be online, smart, and flexible. Doctors are in control. If the markets go on a roller coaster ride, you have the security of knowing that the money is parked for you with the annuity.”
Management fees are low, compared to offerings from retail investment managers. Forestell adds that premiums are “invested in fixed-income investments to back the annuity at better rates than those available to most retail investors. You could diversify your portfolio by substituting the Guaranteed Lifetime Income Annuity for the fixed income portion of your investments, with the added value of certainty. You’ll continue to get your monthly payments no matter how long you live.”
Singh-Cushnie points out that annuities will be even more favourable as interest rates rise: “This is a plan for the long haul, with longer time horizons and a ‘set it and forget it’ philosophy.”
Start by using our modelling calculators online or call us at 1-800-758-1641 (select option 1).
We’re available to answer your questions about the Guaranteed Lifetime Income Annuity and how it can complement your existing Advantages Retirement Plan™ savings and other sources of retirement income.