Indexed Annuity Rates Canada 2013
Indexed and Non-index Annuity Rate Comparison
Indexed Annuity Rates
The following Canadian indexed annuity rates are as of December 12, 2013.
The following annuity rates are Indexed at 2%. The monthly income is based on a premium of $100,000.00 of non-registered funds. The guarantee option is zero and payments will commence in one month.
Male Indexed Annuity Rates
|Age||Indexed Annuity Rates||Non-Indexed Annuity Rates|
|Monthly Income||Monthly Income|
What is an Indexed Annuity?
Normally, annuity payments are fixed, but if you are concerned about inflation, you may choose to have annuity payments indexed. You can choose to have income increase each year by a fixed percentage to help offset the impact of inflation.
Why buy an index annuity? Inflation is a serious problem for retirees on a fixed income. If prices rise but your income stays the same, it’ll become harder and harder for you to maintain your lifestyle. Fortunately, annuity companies design products that insure against inflation costs.
A Good Annuity Strategy Can Help You Beat Inflation
Like I said to Mr. Jonathan Chevreau of the Financial Post that I am "doubtful pensioners with indexed annuities will ever catch up with unindexed ones. The higher the indexing, the less the monthly payout"
Read article: A good annuity strategy can help you beat inflation
Indexed annuity vs Non Indexed Annuity
When considering whether to index your annuity payments, there are several points to consider.
The first point is the actual dollar figure you will receive. If a male aged 65 takes a regular annuity payment of $566 monthly, that is $95 a monthly more than the indexed payment of $471.
If he takes the indexed payments, he will need to live until at least 75/77 before he reaches the $566 payment level he would otherwise have received.
So the question is whether he will live that long and continue to live in good health, If he was ill, it would be foolish to consider indexation at all. So can we safely assume that he will continue in good health to receive and enjoy a higher annuity payment? And also the continued good health of a spouse? If either falls sick with a major health problem during this intervening period of 10 to 12 years, all bets are off. Slowly increasing annuity payaments won't do any good if one partner can't travel or live a normal life.
You do not know what is around the corner, so waiting to receive higher annuity payments, may not yield a better return.