Canadian Annuity Rates
Use of this website will increase your understanding of Canadian Annuities as they relate to guaranteed lifetime income in your retirement years. Canadian life pay annuities are available only from Canadian life insurance companies and like the variation in interest bearing term deposits at banks, annuities vary in payout value from one insurance company to the other.
To obtain an annuity one must pay a lump sum of money to a life insurance company which guarantees to pay a stream of income to that person. There are basically two types of annuities, those that pay for a person’s lifetime which are called life pay annuities and those that pay for a specific period of time which are called term certain annuities.
The majority of queries that we receive pertain to life pay annuities, apparently because this kind of annuity pays for a person’s lifetime and doesn’t it make sense as our life expectancy increases, that a person would want to arrange for some of their income stream to be guaranteed for as long as they live.
Low interest rates have dogged us for the last decade along with the occasional stock market crashes. There is no indication that financial markets are expected to get better as we move into the next decade. Annuities protect against the problem of continuing low interest rates and unexpected stock market crashes.
Canadian Annuity Rates Infomation
At Beaton Annuity Services we are fully knowledgeable about the annuity products offered by all major Canadian life insurers. If you would like to find out whether or not an annuity might become part of your retirement plan, either phone us or provide brief information about yourself in the form above or, the detailed form on our Free Annuity Quote page and send it to us. We will respond with an e-mailed copy of current annuity market rates.
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Your Retirement Savings & Canadian Annuity Rates
Take charge of setting up your retirement now so that you don’t have to worry later about how much or where your income is coming from. If your family history is long lived then the choice of an annuity that removes any need for decisions in later life may be the right one for you. By the time you retire, hopefully you will have accumulated investment assets that will augment your retirement income. Some forms of income will be fully taxable such as Canadian government benefits like Old Age Security which starts at your age 65 and Canada Pension Plan benefits which could start as early as age 60. You may also have accumulated tax deferred income in an RRSP for which you have taken tax deductions from your past income during your working years. Some of you will be calculating the conversion of the value of your home into preferred retirement income.
If you have an RRSP, you are obligated to make an election by the end of the year in which you become age 71 whether to turn that RRSP into a registered retirement income fund [RRIF] or into a registered single or joint life annuity. You may decide to retain part of your income in the form of a RRIF so you can access lump sums for emergencies. You can then put the remainder of your income into a life annuity so that predetermined, specific amounts of guaranteed income will be paid to you for the rest of your life. This guarantees to protect your re-occuring basic needs in retirement such as home expenses and food.
While you have to decide by the end of the year in which you turn 71 years of age what you are going to do with your accumulated registered savings, you don’t have to take any actual payments into income until the beginning of the year in which you become age 72.
Life annuities, insured life annuities, indexed life annuities, cash back annuities and term certain annuities all have their place in planning a structured retirement income. Insured life annuities and cash back annuities provide less income but protect your capital. Indexed annuities provide for guaranteed increasing annual income over a person’s lifetime. The bottom line is that guaranteed income benefits and contractual guarantees of annuities will reduce any of your anxieties over the risk of outliving your retirement savings and potentially ending not having enough money to meet daily needs.
Other Savings & Canadian Annuity Rates
You may also have accumulated non-registered savings which you are holding in term deposits, low interest or non-interest chequing-savings bank accounts. If your savings are earning interest income, you will pay tax on that income. There are opportunities for you to lower your taxable income by examining the benefits of annuities in comparison with other higher taxed forms of income. You may find that an important aspect of having non-registed savings in a non-registered life annuity as part of a retirement portfolio is the potential for lowering taxable income. The current legislation pertaining to Old Age Security benefits requires that the government “claw back” some of that benefit starting at an income level of about $70,000 per person, per year. For every dollar of total taxable income that exceeds the $70,000 threshold, Old Age Security income, reduces by $0.15. If you fall into this higher income bracket, this translates into approximately a 15% additional tax which cannot ever be re-claimed.
Life Annuities & Canadian Annuity Rates
Decide to purchase a life annuity, and you will not have to worry about this source of income for the rest of your life. A life annuity provides a no maintenance, unbreakable income stream that guarantees the annuity income you have purchased will be paid to you for the rest of your life. There is no investment risk and nothing to oversee. Once a life annuity is issued in your name, you can count on the payments not changing in amount or frequency for the rest of your life. Economic conditions or investment returns may change, but the payments from your annuity are guaranteed to remain the same for the rest of your life. Throughout the rest of your life you will enjoy the financial security of a guaranteed income you cannot outlive.
Sorry, only Canadians with their own Social Insurance Number can purchase Canadian life annuities. If Canadian citizens are residing outside Canada, there are circumstances where registered retirement funds can be converted into Canadian annuities. Non-Canadian citizens cannot purchase Canadian annuities in any form.
Latest Annuity Rates Canada News
When planning for retirement, understanding registered deferred annuities is crucial to ensure that your investment strategy aligns with your long-term goals. A fixed premium registered deferred annuity is a popular choice. But one common question is: who bears all the investment risk in a fixed annuity? This question is important as it impacts the security and potential returns you can expect. Let’s dive into this and find the answers, so you can make an informed decision about which annuity best suits your retirement needs.
What is a Fixed Annuity, and Who Bears All the Investment Risk?
A fixed annuity provides a guaranteed return on your investment. With this type of annuity, you agree to pay a lump sum to an insurance company. In exchange, the insurer guarantees you regular payments starting at a specified time, often in retirement. This fixed amount is determined at the time of purchase, and you are assured of receiving it for a set period or for the rest of your life. There is no risk to the person purchasing the annuity. The deferred payments are determined up front and are guaranteed.
So, who bears all the investment risk in a fixed annuity? The insurance company is responsible for assuming the risk. You, as the policyholder, are not exposed to market fluctuations. The insurer guarantees the return based on their financial strength, making it a stable and low-risk investment for you. This provides peace of mind for individuals who are risk-averse or nearing retirement, as it ensures predictable income.
Benefits of a Fixed Annuity
Fixed annuities are often sought after for their stability and security. They are ideal for individuals who want a reliable income in retirement without worrying about the ups and downs of the financial markets. This makes them particularly appealing to conservative investors, as they eliminate the uncertainties that come with stocks, bonds, and other more volatile investment options.
This can be an attractive feature for people who want to avoid the possibility of their retirement savings being depleted by market volatility.
Choosing the Right Annuity for Your Retirement
It’s a good idea to speak with an annuity broker who can provide personalized advice and help craft an annuity plan that aligns with your needs. At Beaton Annuity Services, we specialize in offering tailored guidance for our clients, ensuring that you can make an informed decision without hidden costs. And the best part? There are no broker fees for any guaranteed annuities sold in Canada. Call us at 1-800-667-8818 and let us guide you towards making a confident decision for your future.
 
