Play Safe with Annuities
Annuities are a safe and useful retirement income tool to help mitigate the uncertainty in the investment marketplace regardless of how long you live. They operate as a contract between you and a life insurance company and offer you worry free retirement.
After 2008, with the unpredictable financial environment, annuities have risen dramatically in popularity, especially among conservative investors. With annuities, even though market conditions and investment performances fluctuate, you can stabilize your retirement income. In addition to this, you never outlive money because they can offer guaranteed income for life no matter how long you live.
How Annuities Work?
There are different types of annuities and they all serve different purposes.
1. Life Annuity
2. Term-Certain Annuity
One of the most popular annuities is the Life Annuity, which can be issued jointly between spouses. They work by taking annuitants estimated life expectancy, income, current age, amount of investment, and the current interest rate environment into account (based on actuarial data). With a Life Annuity, in the event of your death, your spouse may continue receiving the regular, guaranteed payments. Another thing that works in favor of life annuities is that they can also have a flexible frequency of payments.
Facts about Annuities you should know before purchasing;
• Like life insurance, they are irreversible upon purchase.
• They can be purchased by using funds from your RRSP, RRIF, LIF, LIRA or Non-Registered Savings Plans.
• The payment rate may be a lower return than other tools, but at the end of the day, they provide you peace of mind.
• Your annuity will be fully insured by Assuris, a non-profit organization which is under Canadian Federal regulation which protects insurance policyholders.
If you are a conservative investor, annuities may be an excellent component to your retirement income portfolio because they allow you to play it safe.
At Calla Financial Services Ltd., we are happy to assist you with your investment and retirement goals.