Is an annuity a good way to guarantee income?

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Advantages of life annuities

One of the advantages of life annuities is the guarantee that you and your partner, if included, won't outlive the income.

After you have spent a lifetime wrestling with a job, children and the up and downs of life generally, it is a great relief to know that on the 1st of the month, your annuity cheque with guaranteed income, will be automatically deposited in your bank account.

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Is an annuity a good way to guarantee income? usat.ly/12tfq31

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And along with any government pension, and a company pension cheque if you're lucky, you are now set to enjoy the coming years. You don't have to worry about the stock market, dragging your income up and down, leaving you worrying that an event like the crash is 2008 could leave you almost destitute.

Why buy annuities?

Peace of mind is one of the main reasons people buy annuities. But another is the income tax advanatges as only a small part of the income from a non registered annuity is taxable. And the older you are, the less tax you pay. Of course this does not include annuities bought with RRSP funds or RRIFs, as you have not paid tax on the caopital or its growth.

Overall, annuities supply that confidence that , no matter what happens, you'll be fine. That is what a guaranteed income can do for you.