This website is about Canadian Annuities and how they might fit into your retirement plans. The top menu of this website allows you to navigate to areas that cover different aspects of annuities. If you do not find what you want, call either of the telephone numbers shown below and we will be happy to address your specific questions. Talk to John Beaton and get all the annuity advice and assistance that you need to get the best annuity rates and annuity options available for you.
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. Depending upon your age, an annuity could provide completly non-taxable income.
|The Canadian Government recently announced in 2016 that new mortality tables must be adopted by Canadian life insurance companies as of January 1, 2017. The new mortality tables reflect positive changes in the number of years Canadians are expected to live. The effect this will have on non-registered life annuities purchased after January 1, 2017 is that the taxable portion of each payment will be increased dramatically. Annuities purchased before January 1, 2017 will qualify for existing mortality tables. Existing mortality tables will also apply to new life annuities purchased before January 1, 2017, even though payments might be deferred until sometime afterJanuary 1, 2017.|
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.
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.
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.