BMO Launches Next Phase of Lifecycle Investing With Unique Cash Flow Product



    
    BMO launches LifeStage Retirement Income Portfolios that offer:
    -   monthly tax-efficient cash flow
    -   principal protection over the term
    -   exposure to the growth potential of equity markets
    -   lifecycle approach to asset allocation
    

    TORONTO, Feb. 4 /CNW/ - With one in two Canadian boomers expected to live
into their nineties, the average Canadian should be planning to fund a
retirement that could last 20 - 30 years. This means most retiring boomers
will still need to grow their assets while seeking tax-efficient income
solutions in order to fund ongoing spending needs during their retirement
years.
    To better meet the often competing needs of cash flow, investment growth
and capital preservation, BMO Financial Group today announced the launch of
BMO LifeStage Retirement Income Portfolios.
    "As boomers approach retirement, they are often worried about the impact
of market volatility on their investments - they don't want to lose what they
have worked so hard to save. They also want a predictable cash flow in
retirement, but they are concerned that taxes and inflation may quickly erode
their retirement savings," said Mark Stewart, Senior Manager, Product
Development and Management, BMO Mutual Funds.
    "When it comes to funding their retirement, boomers and retirees
ultimately need the following things: capital preservation, growth potential
for their investments, inflation protection, tax minimization and dependable
cash flow. Unfortunately, there aren't many options available to achieve all
of these goals - that's why BMO LifeStage Retirement Income Portfolios can
play a vital role in your investment portfolio," said Stewart.

    
    Key features of BMO LifeStage Retirement Income Portfolios:

    -   Principal protection through guaranteed capital distributions during
        the term and the payment of any residual balance at maturity

    -   Stable and predictable monthly cash flow indexed to inflation -
        investors receive monthly capital distributions that are adjusted
        annually for inflation to preserve their purchasing power.

    -   Tax efficient capital distributions; no tax on income or capital
        gains from underlying mutual funds; no tax on rebalancing of the
        portfolio and no tax on inflation adjustments

    -   Exposure to the growth potential of a diversified portfolio of
        leading BMO Mutual Funds

    -   Lifecycle approach to asset allocation - asset mix systematically
        becomes more conservative as the maturity date approaches to reduce
        market risk

    There has been significant demand for guaranteed product offerings like
Principal Protected Notes, Segregated Funds and Guaranteed Lifecycle Funds.
However, not many guaranteed products offer cash flow options for investors.
"Our new offering represents the next phase of lifecycle investing - which
began with our popular BMO LifeStage Plus Funds - by providing a cash flow
solution for investors preparing for or entering their retirement years," said
Stewart.

    How BMO LifeStage Retirement Income Portfolios Work

    BMO LifeStage Retirement Income Portfolios are notes providing exposure to
the growth potential of the following professionally-managed mutual funds: BMO
Dividend Fund, BMO U.S. Equity Fund, BMO International Equity Fund, BMO Bond
Fund and BMO T-Bill Fund.

    Additional features include:
    -   Minimum capital distributions of 6.0 per cent per year (payable
        monthly)
    -   Guaranteed capital distributions until the principal amount is repaid
    -   Annual inflation adjustment
    -   No tax payable until disposition or maturity
    -   Maximum annual fee of up to 2.25 per cent
    -   $5,000 minimum investment
    

    There are three different versions of BMO LifeStage Retirement Income
Portfolios:

    Current Pay (15 year term)

    Tax-efficient cash flow begins in year one with annual capital
distributions of 6 per cent, indexed to inflation, and guaranteed until
principal is repaid.

    Deferred 5 Year (20 year term)

    Tax-efficient cash flow begins in year six with annual capital
distributions of 6 per cent, indexed to inflation, and guaranteed until
principal is repaid. The annual inflation adjustment occurs during both the
initial 5-year growth phase and subsequent 15-year distribution phase.

    Deferred 10 Year (25 year term)

    Tax-efficient cash flow begins in year eleven with annual capital
distributions of 6 per cent, indexed to inflation, and guaranteed until
principal is repaid. The annual inflation adjustment occurs during both the
initial 10-year growth phase and subsequent 15-year distribution phase.

    BMO LifeStage Retirement Income Portfolios are only available at BMO Bank
of Montreal branches.

    Investments in BMO LifeStage Retirement Income Portfolios are not mutual
fund investments. They are investments in principal protected deposit notes
(the LifeStage Notes) issued by Bank of Montreal and will constitute direct,
unsecured and unsubordinated debt obligations of Bank of Montreal. Changes in
the value of the underlying funds will directly affect the returns payable on
the Notes. It is possible that no return may be paid on the LifeStage Notes.
Capital distributions are repayments of principal that will only continue
until $99 per $100 LifeStage Note has been repaid to the holder, after which
no further capital distributions will be made on the LifeStage Notes.
    This press release is for information purposes only and should not be
construed as an offering of LifeStage Notes or investment advice. Please see
the Master Information Statement and relevant Supplement for additional
details on LifeStage Notes. Please visit any BMO Bank of Montreal branch or
www.bmo.com/mutualfunds for more information.




For further information:

For further information: Media contacts: JoAnne Hayes, Toronto,
joanne.hayes@bmo.com, (416) 867-3996; Lucie Gosselin, Montreal,
lucie.gosselin@bmo.com, (514) 877-1101; Laurie Grant, Vancouver,
laurie.grant@bmo.com, (604) 665-7596; Internet: www.bmo.com/mutualfunds


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