Guaranteed Withdrawal Plans are structured as an insurance contract, such as a segregated fund, but also have a guaranteed withdrawal benefit. The guarantee provision protects investors from investment losses, while also enabling them to lock in gains through automatic resets every few years, depending on the company. These products are aimed at the conservative investor, those over the age of 55 and nearing retirement. They are designed to protect an investor against the risk of longevity - the risk that an investor will outlive their retirement savings because of market losses or inflation. The withdrawal benefit gives the annuitant the right to withdraw a maximum percentage of their entire investment each year until the initial investment amount has been recouped.
