How does a payout annuity work?

Key advantages and who they're suited for?

Who's most suited for payout annuities?

• People nearing retirement
• Early retirees who want more income until OAS begins
• Clients who must convert RRSP funds to an income stream
• Retirees with limited financial management experience
• People desiring an income stream to cover specific fixed expenses
• Anyone advising/managing finances for elderly parents
• Anyone concerned about outliving their retirement savings

Key advantages of payout annuities

• Provide a regular income stream for retirement or fund a major expense (e.g. mortgage, ongoing healthcare, vacation, etc.)
• Payments will continue, unchanged, for life or the designated term regardless of interest rate fluctuations
• As part of a diversified retirement income plan, annuities reduce risk, add stability
• Ideal to top-up retirement income
• Annuities can create personal pension plans for those without pension plans
• Annuities can be integral to estate planning (i.e. death benefit guarantees, appointment of beneficiary to avoid probate, if any and create potential creditor protection1, etc.)
• Suitable for investors who can’t or don’t want to actively manage part of or all of their capital
• No one knows how long they will live, and with a life annuity, your clients can never outlive their money. Joint life annuities can also protect their spouse’s income
• Cashable feature with non-registered accrual annuities allows clients access to cash