News Releases

BMO Bank of Montreal today announced the launch of BMO Income Generator, a guaranteed investment solution that can be customized to earn interest and automatically provide investors with a steady stream of monthly income over a five-year term.

“After what seems like a lifetime of saving for retirement, boomers are now approaching the stage when it will be time to start spending that nest egg,” said Julie Sheen, Vice President, BMO Term Investments. “Many pre-retirees view retirement as a ‘reward' for a lifetime of hard work, so they want to make sure they have the cash flow to fund their desired retirement lifestyle.  At the same time, they worry about having enough funds to meet unexpected expenses, so preserving assets is very important to them as well. As a result, as boomers approach retirement, their investment focus often shifts from growth, to income and capital preservation.”

In addition to planning their own retirement, boomers are also juggling the needs of their parents and children. In fact, three in five Canadian boomers with children aged 18 and over are providing some kind of financial support to their kids, while one-quarter of those boomers whose parents are still alive have one or more elderly parents who need their assistance on a regular basis.*

Unlike traditional Guaranteed Investment Certificates (GICs), BMO Income Generator is a guaranteed investment solution for conservative investors who wish to protect their capital, while receiving a steady stream of monthly income.  Each equal monthly payment may be comprised of both principal from the original investment and interest or interest alone. Based on individual needs, the investor determines the monthly payment amount and the date on which to receive it. BMO Income Generator is available in a five-year term that allows investors to re-assess their monthly income needs in manageable five-year increments.

“Since one in two Canadian boomers will live into their nineties, planning for a 20 – 30 year retirement is a new reality.  It can be overwhelming to plan for such a long time-frame, so arranging for and re-assessing your financial needs in five-year increments is a simple strategy with built-in flexibility,” said Sheen.

According to the BMO Retirement Trends Study, the most comprehensive survey on Canadian retirement compiled to date, more than half (54 per cent) of Canadian financial decision-makers 45 years of age and older think they know how much money they'll need in retirement.  Of these respondents, 66 per cent consider their
retirement income needs from a monthly perspective.**

“Breaking retirement income down into monthly payments is a practical way for pre-retirees and retirees to conceptualize how they're going to fund their lifestyle in retirement,” said Sheen. “While some investors are looking to supplement their various sources of income, such as pensions and registered income, to finance the lifestyle they want in retirement, others could be figuring out what they want to do with a lump sum of money from an inheritance, downsizing their home or selling a business. Investment professionals at BMO Bank of Montreal will work with each customer to understand their particular circumstances to determine how to customize a solution that will work best for them,” added Sheen.

BMO Income Generator is a non-registered investment solution. The interest rate is customized to each customer's needs, taking into account the amount of initial principal invested, monthly income received and current market interest rates. The minimum investment amount is $10,000.

BMO Term Investments is part of BMO Financial Group's Private Client Group. BMO's Private Client Group provides integrated wealth management services in Canada and the United States and had total assets under management and administration and term investments of $280.1 billion as at July 31, 2006.

*Findings from a national telephone survey of more than 1,500 people conducted for BMO Financial Group by The Strategic Counsel between May 24 and June 5, 2006.

**The BMO Retirement Trends Study was conducted for BMO Financial Group by Ipsos Reid. It canvassed 5,325 Canadian financial decision-makers 45 and over from October 21 to October 27, 2005. 

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