Life Annuities Can Buy Peace Of Mind
Ultimate retirement savings plan
When Bob and Nancy and other Canadian retirees get together for coffee or tea, the subject they often discuss is "how the heck are we going to achieve our financial dreams for the future?" Because these retirees understand the many retirement savings products on offer from insurance companies, they are now taking advantage of an annuity plan now. Thousands of Canadian retirees have joined them by committing their savings now for safe and reliable life annuities.
Creating a retirement savings plan for future payouts
Another aspect of a life annuity plan for retirement income is linked to the option of having life annuity payments for a specified period. For instance, they want their life annuity to kick-in when the two 60-year-olds hit 70 in 2014. "The goal is to sock away funds to help our grandchildren with their college education," said Nancy who taught math for 22 years in Vancouver. "I know from what my students learned about saving money, that a life annuity is a solid retirement savings plan because it has many advantages for guaranteeing income."
Advantages of a life annuity
They are confident that their plan to use the annuity at 70 will work out nicely because they want a financial safety net in place "when and if Bob and I become ill, and need funds to cover our medical bills or assisted living," explained Nancy. In turn, there are numerous online testimonials from other Canadians who concur with their view that having a fixed life annuity to lock in an income stream for their retirement years is a practical and solid idea.
Advantages to this type of guaranteed income include:
- The ability to create fixed income payments that will be ready when needed as a true retirement savings plan.
- The peace of mind that comes with knowing you can expect a "guaranteed income" down the road.
- The ability of having a lifetime annuity plan with payments that keep your income in safe hands.
- The annuity is flexible and it can be paid out on an annual, quarterly or monthly basis.
- A client can ask that payments will start at a set time for their rest of their life, or for a set number of years and life.
- Your friendly insurance agent or financial planner can help with the basic questions about life annuities. For example, we recently sat down with our insurance company agent for a briefing on the basics of annuities. We learned about the advantages and disadvantages of annuities and opted for a life annuity because it worked best for our future retirement plans.
In general, the real beauty of an insurance product is that it pays out income and is for citizens wanting to use it as part of their overall retirement strategy.
Useful retirement planning tools
A recent Canadian government watchdog group - for seniors facing their retirement years in this uncertain economy -- stated that an annuity is a both a practical and very useful retirement planning tool because the law in Canada is that the savings funds you contribute to an annuity are only partially taxed. This mirrors the Bob and Nancy's goal of using an annuity as retirement income for a guaranteed period of time. The couple said they wanted specific payments made during the first five years, and for life.
Also, savings their local insurance agent explained that if both of them pass away before the end of a life annuity, that their family members would receive the remainder of the payments. They said this means "real peace of mind" for them during these uncertain financial times.
Do-it-yourself retirement savings
There are some people we know who like annuities because they view this type of retirement planning as a sort of "do-it-yourself" method. In turn, they and other Canadian retirees find this type of insurance product to be very safe because it gives a feeling of security. They also view a life annuity as akin to creating one's own pension plan with a monthly income when they really need it.
A life annuity plan is aimed at converting a certain portion of the retirement nest-egg for that monthly income plan that will stay in effect as long as the couple lives.
Overall, there are many retirement plans that appeal to retirees in Canada today, but the guarantee of a life annuity is simple, low-risk and offers a steady payment option for life. You just can't beat that.