The Benefits of Annuitizing Before January 1, 2017
March 23, 2016
Ivon T Hughes
New Taxation Rule Changes Coming in 2017
The new changes from the Government of Canada to prescribed annuity taxation will provide a compelling reason for seniors to contemplate annuitizing their non-registered funds before January 1, 2017.
Annuities purchased before Jan. 1, 2017 will still use the old 1971 mortality tables, even if annuity payments don’t begin until after Jan. 1, 2017
Incentive to Buy Now - So Act Now!
This grandfather clause provides a strong incentive to purchase a non- registered annuity before Jan. 1 2017.
A non-registered life annuity has great benefits, but with these tax changes coming January 1, 2017, it becomes a "do it or lose it" proposition.
The two significant benefits of a life annuity are:
- lifetime guaranteed income unaffected by the market or interest rates for single or couples.
- the only guaranteed income available, period.
Until age 90, income from a life annuity bought with non-registered money, qualifies for preferential tax treatment.
The taxable portion of each payment will increase and reduce the after-tax income you receive, so you need to make a decision now.
Pre & Post 2017 Annuity Example
About the Author:
Ivon T Hughes is a leading expert in life annuities in Canada. His website LifeAnnuities.com is a recognized authority on annuities. He's also an established insurance and investment broker, licensed across Canada through The Hughes Trustco Group since 1972. Recently, he's been redefining how annuities are sold in Canada.