A life annuity is an investment that turns the lump sum of your RRSPs or non-registered funds into a steady income for the rest of your life.
When you're ready to think about buying a life annuity, you have a few options.
Retirement Income Planning
Most companies have been around for a long time and have always offered different ways to make sure you have money when you retire. Whether your pension funds are registered or not, you can choose the most competitive ways to use them.
What Makes a Difference in Life Annuities
Rates of interest
- Interest rates and other market factors affect life annuities.
Mortality
- The amount of money you get from a life annuity depends on how long you and your spouse expect to live. The more years you have lived, the more money you will get.
Choices for a Life Annuity
- How much money you get from an annuity will depend on the choices you make at the beginning. If you choose a longer guarantee period, your income will be less.
Gender
Men start out with more money than women because, on average, women live longer than men.
LIFE ANNUITY OPTIONS
One-time payment for life
- Gives you money for as long as you live.
Joint Annuity for Life
- Gives you an income for the rest of your life. When you die, your surviving partner will continue to get a set amount of money.
The level is usually 100% of your income and rarely some other number.
The life annuity pension will last for the partner's whole life.
Level Income
- Gives you an agreed-upon fixed amount of money.
Bringing in more money
- Gives you a steady income for life that goes up by a set percentage every year.
Guarantee Period
- If you die within the guarantee period, the person who is supposed to get your life annuity income will still get it after you die.
No Guarantee Period
- If you have a joint life plan, your life annuity income will stop when the second person in the plan dies.
Payment Frequency
- Every month or once a year
