There has recently been a lot of interest in Annuities. They are currently guaranteeing the highest payout rate that has been offered in decades.
Annuities are great for:
· Someone who is worried about outliving their income.
· Someone who likes guarantees.
· Someone who may have been having a hard time finding the right investments, possibly a smaller account.
· By purchasing an annuity to ensure, one can, along with OAS and CPP ensure that their basic living expenses will always be covered, see graph below:
· There also has been talk about Canadians delaying OAS and CPP benefits for the long-term advantage. A term certain annuity can help bridge that gap between ages 60-70 and help make that possible.
Here’s an idea how this set it and forget it strategy looks based on:
o Various ages listed below are when the annuity is purchased.
o A $100,000 RRSP investment
o Guaranteed income until the day they die, there would also be a 10-year guarantee period where if they die in the first ten years the beneficiary would receive the income to the end of 10 years.
o Note that the joint life scenario would reduce income to 60% upon first death.
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Please note that only Echelon Wealth Partners is a member of CIPF and regulated by IIROC; Chevron Wealth Preservation Inc. is not. *Insurance Products provided through Chevron Preservation Inc.