Annuities
Trade market uncertainty for a guaranteed paycheque that lasts as long as you do.
Key Benefits
Longevity Protection: Income you cannot outlive, no matter how long you live.
Prescribed Taxation: Specialized tax treatment creates higher after-tax income.
Joint Life Options: Income continues to your spouse after your passing.
Worry-Free: Zero stock market risk or management required.
"For retirees concerned about outliving their savings, an annuity is the closest thing to a defined benefit pension. By purchasing an annuity, you lock in a specific income rate for life, removing the stress of market volatility from your retirement years."
Annuities: Frequently Asked Questions
You pay an insurance company a lump sum, and in exchange they pay you a guaranteed income for a set period or for the rest of your life, regardless of how long you live or how markets perform. The payment amount is fixed at purchase based on your age, sex, prevailing interest rates, and the options you choose.
It depends on how the annuity is registered. Payments from a registered annuity funded with RRSP or RRIF money are fully taxable as income. A non-registered "prescribed" annuity spreads the return of your original capital evenly across payments, so only the interest portion is taxed each year, usually resulting in a lower, more level tax bill.
A straight life annuity stops paying at death, but most Canadians choose options that guard against this, such as a guarantee period where payments continue to a beneficiary for a minimum number of years, or a joint life annuity that continues paying a spouse for their lifetime.
Yes. Many retirees annuitize only a portion of their savings, enough to cover essential fixed expenses alongside CPP and OAS, while keeping the remainder invested for growth and flexibility. This blended approach provides guaranteed income for life without giving up all market exposure.
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