Long regarded as a safe a reliable income stream, annuities were once the primary source of lifetime pensions offered by companies. With prolonged and severe stock market fluctuations Canadians are once again buying annuities to provide a long term and stable source of retirement income. Annuities work by depositing a lump sum of money in exchange for an regular income for life or a fixed period of time. There a number of ways to customize an annuity to best suit your goals.
Annuities
Annuities provide peace of mind knowing that the payments are guaranteed and are payable for life or a specified term.
Annuity Options:
- Single Life: Payouts are guaranteed for your entire life.
- Joint & Last Survivor: Guaranteed payout for the life of either spouse.
- Term Certain: Guaranteed payout for a fixed period of time, not dependent on the life of the annuitant.
Payments:
Payments will be direct deposited to your bank account monthly, quarterly, semi annually or annually.
Taxation:
- Prescribed Annuities: Purchased with non-registered funds, the tax liability is spread evenly thoughtout the life on the contract.
- Non-Prescribed Annuities: Purchased with registered funds, income will be taxed in the year the funds are received.
Please note: Higher payouts are available based on age and for annuitants considered to be in substandard health.