Retirement annuities
Looking for stable income in retirement, without stress or surprises? An annuity could be a solution to include in your withdrawal strategy. Discover how you could turn part of your savings into guaranteed income, so you can enjoy life without worrying about running out of money.
What is an annuity?
An annuity is a financial tool that allows you to convert a sum of money—often from your retirement savings—into a series of periodic payments. In exchange for an initial amount paid to an insurer, you receive stable income for a set period or for the rest of your life. It's an effective way to ensure a predictable source of income, which can be helpful in retirement.
We can help you explore this type of product and offer solutions with our partner Normandin Beaudry. Don’t hesitate to contact us or book an appointment with an advisor.
- Longevity protection: Helps protect against the risk of outliving your savings.
- Guaranteed income: Provides stable income regardless of market fluctuations. If you don’t have an employer pension plan or if you want to supplement your QPP and OAS benefits, an annuity could be an attractive solution.
- Simplicity: Less day-to-day financial management.
- Customizable options: Possibility of adding features like indexation or survivor benefits.
Life annuity
A life annuity guarantees that you will receive income for the rest of your life. For example, suppose you purchase a life annuity for $100,000 at age 65 and receive $500 per month—you will have recovered your initial $100,000 by age 82. If you live beyond age 82, you will continue to receive $500 per month until your death.
- Guaranteed period option
If you pass away before the end of this period, the remaining payments are made to your beneficiary or your estate. - Joint and survivor annuity option
Payments continue to be made to your spouse after your death. - Indexed annuity option
Payments increase periodically to keep up with inflation.
You can combine these options, but each additional feature reduces the amount of income you receive.
Term certain annuity
A term certain annuity guarantees income for a set period, such as 10 or 20 years. If you pass away before the end of that period, the remaining payments are made to your beneficiary.
- Indexed annuity option
Payments increase periodically to offset inflation.
How to choose the annuity that best suits your needs?
Here are a few questions to consider:
- Do you want guaranteed income for life?
- Are your CPP and OAS benefits enough to cover your essential needs?
- Do you have a low risk tolerance and prefer to avoid market volatility?
- Do you want to cover your basic expenses with stable income?
If you answered "yes" to several of these questions, an annuity might be a good option for you. It’s recommended to speak with a financial advisor to assess whether an annuity fits your situation and retirement goals.
- Review your situation, investments, and assess your needs
- Provide tools to help you set and track your goals
- Create a retirement plan or review an existing one
- Plan your withdrawals and optimize them based on your situation (annuities, group RRSP, pension plan, etc.)
- Develop a comprehensive financial and estate plan that considers all aspects of your situation—from investment management and tax optimization to wealth transfer
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