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    Categories: Retirement

Income from an Annuity

What happens when you wait to receive income from an annuity?

If you are waiting because you believe you will get more money each month, well, that might be true; your monthly payments might be greater.

But how much greater? Let’s say instead of taking a $1000 monthly annuity income today, you wait 6 months and receive $50 more annuity income  or $1050. You have missed out on $1000 x 6 months which you are now making up at the rate of $50 a month. That means that you must live at least 10 years to make up this difference.

But this ignores the fact, that for annuity rates to increase by 5% in 6 months, requires a lot higher bond interest rates and very strong business activity.

This is not what is happening today. Interest rates have been at an all-time low for a long time and it may well be 2014 until interest rates increase. If your investment is not making a solid return, you need to take advantage of coupling your age with the capital to get yourself a good, guaranteed annuity income.

Posted by: Phil Barker: Phil is a leading expert in life annuities in Canada. His website Life Annuities.com is a recognized authority on annuities. Recently, he's been redefining how annuities are sold in Canada.