Canadian Annuity Rates
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Take charge of your retirement. By the time you retire, you will be taking retirement income from several sources. Some will be fully taxable such as Canadian government benefits like Old Age Security which start at your age 65 and Canada Pension Plan benefits which could start as early as age 60. You may also have accumulated registered retirement income in an RRSP for which you have taken tax deductions from your past income during your working years.
When your start taking income from your RRSP, you have at latest to make an election at age 71 whether to turn that RRSP into a registered retirement income fund [RRIF] or into a registered life annuity. You can defer taking any income from your RRSP in either income form, RRIF or Anuity, until your age 72. You may also have accumulated non-registered savings which you are holding in term deposits, or simply chequing-savings bank accounts. If your savings are earning interest income, then 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.
Life annuities, insured life annuities, indexed life annuities, cash back annuities, term certain annuities and variable annuities all have their place in planning a structured retirement income. Insured life annuities and cash back annuities provide less taxable income with protection of your capital. Indexed annuities provide for guaranteed increasing annual income over a person's lifetime. Variable annuities are flexible in that they take advantage of a RRIF format, providing the better of RRIF minimum payments or guaranteed level lifetime income, which ever is the higher payout.
Retired persons 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. For every dollar of total income that exceeds the $70,000 threshold, Old Age Security income, reduces by $0.15. If a retired person falls 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 your 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.
Use the annuity navigation buttons at the left of this page to find out more about annuities and to request a free survey of current guaranteed Canadian annuity rates.
Sorry, only Canadians with their own Social Insurance Number can purchase Canadian life annuities. Non-Canadian, non-residents of Canada cannot purchase Canadian annuities in any form.
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