Annuity vs GIC
Article in the Ottawa Citizen
In a recent article in the Ottawa Citizen "Ask the finance expert: Annuity vs. GIC for house proceeds" there are a number of statements with which I take issue.
As a long-time annuity broker handling only life annuities, I would question why the longest possible guarantee would not be taken by this lady. The difference in the income, even without taking the taxation into consideration, is vast. So unless she needs the income, she should consider a maximum guarantee period to benefit her family.
Then the writer says "the commuted value of remaining payments are paid out directly to her beneficiaries". Not so. This is non-registered savings money and the payments can continue to the named beneficiary for the balance of any guarantee period. In fact this procedure has been used by may clients to bestow a continuing beneficiary benefit to grandchildren.
And lastly this lady can get a life annuity guaranteed for 3 years to age 115.
In our article "Annuities vs GICs: Proof that Annuities are Better than GIC's" there are some discussion points and graphs on this topic Each person needs to weigh the pros and cons of their personal situation, taking present and future plans into consideration.