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Retirement Payout Annuity
What Is A Retirement Payout Annuity?
What Is A Retirement Payout Annuity?
Retirement Payout Annuity is an excellent choice. The income is guaranteed because there is no market exposure. Annuities also offer a higher income rate than many other guaranteed income products and tax advantages for non-registered funds. An annuity gives you options that bring versatility to your investments.
When you purchase a payout annuity, you turn over your retirement savings to an insurance company, which is then responsible for providing regular, fixed payments. Typically these payments are made monthly. They are a combination of a repayment of a portion of the annuity principal and income earned by the invested money.
Payments are taxable in the year they are received. Annuities often appeal to retirees who want a simple income solution that provides worry-free fixed payments that won't change throughout retirement.
Who's most suited for payout annuities?
- Seniors nearing retirement
- Anybody worried about outliving their retirement savings
- Early retirees who want more income
- Anyone desiring an monthly income to cover fixed expenses
- Seniors who must convert RRSP funds to an income stream
- Retirees with little knowledge to stock markets
- Anybody overseeing finances for their retired parents
View what your annuity income could be in retirement.
Do you want to know what your guaranteed income could be with a Retirement Payout Annuity? In one single step our Annuity Calculatorwill survey all the annuity companies and will show you exactly how much retirement income you would receive.
Annuity Payout Calculator
1. You can enter the deposit amount to invest and our annuity calculator will calculate the exact monthly income you will receive for the rest of your lifetime.
2. You can enter the monthly income you want to receive and our annuity calculator will provide how much you need to deposit.
Select the type of annuity you are interested in
When you opt for payout annuity in retirement, you have three choices:
- Single Life Annuity
- Joint Life Annuity
- Term Certain Annuity
This annuity provides a guaranteed income that last for the life of just one person.
This annuity provides a guaranteed income that last for the lives of both you and your spouse.
This annuity provides a guaranteed income for a specified period of time.
If the insurance company defaults, what happens to my payout annuity?
If your life insurance company fails, your payout annuity policy will be transferred to a solvent company. On transfer, Assuris (see Assuris.com) guarantees that you will retain up to $2,000 per month or 85% of the promised Monthly Income benefit, whichever is higher.
How are payout annuity rates calculated?
The insurance company looks at several factors to determine payout annuity rates.
- The premium amount: the amount you want to invest.
- Gender
- Type of funds (registered or non-registered)
- Type of annuity (single, joint or term certain)
- Purchase date (the date you buy the policy)
- Payment date (the date you want to receive your income)
- Extra options you select (guarantee period 0, 5, 10, 15, 20, indexing)
Annuity details:
This chart is based on a male, aged 65 with a deposit of $100,000 registered funds. Purchase date March 1, 2013 with payment date of April 1, 2013. The secondary annuitant is a female aged 65. This illustration will show how your income may drop as you add extra options.
| Type of annuity | How does it work? | Monthly income |
|---|---|---|
| Single life annuity with no guarantee option | Provides you with income for life | $539.13 |
| Single life annuity plus 5 year guarantee | Provides you with income for life. Plus guarantees 5 years of payments to your beneficiary in case you die within the first five years of your contract. | $535.49 |
| Single life annuity plus 10 year guarantee | Provides you with income for life. Plus guarantees 10 years of payments to your beneficiary in case you die within the first ten years of your contract | $527.55 |
| Joint life annuity | Provides income for life for you and your spouse. Payments stop when both parties die. | $432.58 |
| Joint life annuity plus 5 year guarantee | Provides income for life for you and your spouse. Plus guarantees 5 years of payments to your beneficiary in case you both die within the first five years of your contract. | $432.53 |
| Joint life annuity plus 10 year guarantee | Provides income for life for you and your spouse. Plus guarantees 10 years of payments to your beneficiary in case you both die within the first ten years of your contract. | $418.12 |
| Single life annuity indexed at 2% |
Provides income for life. Payments increase with inflation. | $439.27 |
Note: Annuity rates are always changing and its important to shop around for the best rate. We at LifeAnnuities.com shop the market so that you don't have to. If you need some expert advice to help you decide what's best for you please call us toll free 1-877-842-3863 or complete our annuity quote form.
What are the reasons to buy an annuity?
- Peace of mind
- Guaranteed income for life
- Estate Planning
- More favorable taxation
Once you buy a payout annuity, there's no need to make any further investment decisions. An annuity gives you the security and stability you need when you retire. You'll never have to stress about what the market does or whether interest rates go up or down. Your annuity income is guaranteed.
Annuities protect against the risk that a retiree will outlive his savings. A retirement payout annuity guarantees income for the rest of your life. You`ll never run out of monthly income, no matter how long you live.
If you pass away, payments can continue to your surviving spouse, or to another beneficiary with non-registered funds.
Annuity taxation: non-registered annuity payments are a blend of interest and return of capital. A prescribed annuity is taxed more favorable than a non-registered fixed-income product. These payments can help minimize claw-back of applicable government benefits since only part of the annuity payment is considered net income for tax purposes. Non-registered annuities also help level out tax charges and yield more after-tax income up front.
Annuity Quote Requests
Please send your annuity quote requests to info@trustco.ca .The information required for a payout annuity quote can be found in Annuity Quote.
Related resources
Tutorial - What is an annuity?
Annuity Rates - Best payout annuity rates
Annuity Calculator - Retirement payout annuity calculator
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