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My Comments to: Seven smart things the wealthy do with their money

Ms Wright isolates some great measures in her article “SEVEN SMART THINGS THE WEALTHY DO WITH THEIR MONEY.

None of them is complicated or in any way difficult. They are just simple-to-do everyday things. You don’t have to be “somebody” to follow this simple money management plan.

And as we are now at tax time,her point about annuities is especially relevant. Non registered annuities, whether income is taken now or delayed, uses your age or ages, to guarantee a lifetime income. Either registered or non registered annuities can be prescribed, to give you peace of mind with the same monthly payment.

And the last point about hiding money from yourself is also important. If funds are automatically diverted from your account, you’ll not miss them until you need them.

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From Ottawa, Metro: Consider annuities for a secure retirement income.

An interesting article from Sun Life explaining the virtue of a life annuity as guaranteed income.

But there should be no set arbitrary amount or percentage to invest. We live in very volatile times, politically and financially, and people are scared and worried about the future. The US which dominates our business landscape, is locked in an election where the majority of people hope that no one wins!

If you have sufficient guaranteed income from an employer and the government and feel you can handle it,jump into a RRIF with investment funds. But don’t put money in there that you will possibly need to top up your income down the road.

When money, and therefore income, is lost at the latter stages of your life, you don’t have the time to replace it.

Read full article from Ottawa Metro by Talbot Boggs – Consider annuities for a secure retirement income.

consider annuities for a retirement income

Use our Annuity Calculator to instantly calculate your annuity income online. To find out approximately how much Guaranteed Income For Life you can receive.

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Annuity Broker: Canadian Independent Annuity Broker

Talk to an independent annuity broker who can advise you on Canadian Annuities and how they can fit into your retirement plan.

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Ivon T Hughes annuity broker since 1972.

Ivon T. Hughes is a Canadian annuity broker who represents all the annuity companies in Canada and has been in business since 1972. Call Ivon toll free in Canada  1-877-842-3863 or 514-842-9001 from U.S and internationally.

Why Use an Independent Annuity Broker?

Annuity policies can only be purchased from an insurance agent or broker.  It also makes more sense to use an independent annuity broker to do the shopping and the research for you. In addition, insurance agents only represent one company and are tied to selling their annuity products.

An independent annuity broker can get you annuity rates from all the life insurance companies. The following is a list of Canadian insurance companies that sell life annuities in Canada.

An Annuity Broker’s List of Companies Should Consist of the following:

1. BMO Insurance
2. Canada Life Assurance Company
3. Desjardins Financial Security
4. Empire Life Insurance
5. Equitable Life
6. Great-West Life
7. Industrial Alliance
8. ivari (formerly Transamerica)
9. La Capitale
10. Manulife Financial
11. RBC Insurance
12. Standard Life (now Manulife)
13. Sun Life Financial

Ask Ivon T Hughes to find you the best annuity deal for you. We’ll shop the market and send you all the annuity rates. Furthermore, the services provided are free of charge and you’re under no obligation to buy any of the quotes you receive.

If you would like more information on annuities please use our contact us page and request a call from Ivon T Hughes. In addition, you can also complete our online annuity quote form and we’ll get back to with an annuity illustration.

Advertising Newsprint: 1986 The Montreal Gazette

Independent Annuity Broker Ivon T. Hughes
Ivon T Hughes is an independent annuity broker.
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Countdown to January 1, 2017 – When Prescribed Annuities Tax Changes Take Effect

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To beat the clock if you want to avoid the 2017 tax rule changes for prescribed non-registered annuity payments, you need to buy before 2017 rolls around. The higher taxable portion will result in higher taxation, so you need to buy now.

What is actually happening is that the federal government tax changes, made under the income tax act, are increasing due to the discarding of the 1971 life expectancy tables. There will be grandfathering for those who do not want to commence payments until 2017,  so it is apparent there are great benefits in annuitizing before January 1st, 2017.

Act now and get a prescribed annuity quote.

 

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Annuity Deadline Approaching for Registered & Non-Registered Annuities

We are fast approaching a deadline for any annuity business you want to do this year.

Annuity Deadline January 1, 2017

While the official cutoff date for annuities to be issued by January 1st, 2017  the practical date is a lot earlier.

All the people who have turned 71 this year and have not bought a RRIF or a registered annuity, turn up in the tens of thousands at year end. You know who you are; you’re waiting for rates to go up or for the stock market to settle down.

Neither will happen. And for your peace of mind you don’t need to worry whether your money will be clogged up and not transferred in time for you to avoid paying tax on all the capital. It has happened and it will happen again to those who do not properly plan.

And on top of all that, the same applies this year to buyers of non-registered prescribed annuities who must annuitize before January 1, 2017  to avoid increased taxation, even if starting the income later.

So this blog is a shot across the bow. If you have any intention of getting an annuity, the time is now. Complete our annuity quote form and we’ll provide a personal annuity illustration.

Thank you,

Ivon T Hughes
The Hughes Trustco Group
Toll free: 877-842-3863
Website: LifeAnnuities.com

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My comments on “Buying a prescribed annuity?” by Rob Carrick of the Globe and Mail

Rob Carrick has written another helpful article on prescribed annuities, this time specifically on non-registered annuities.

Yes, it’s come time to make up your mind on whether you want your retirement savings to be both guaranteed and remunerative, while paying less taxes.

A non-registered annuity increases your monthly income and reduces your income tax on that capital. If you are concerned about market volatility and low interest rates which could guarantee losing not only capital but income,then this is the way to go. Rob introduces several examples but as usual, you need to get your own figures to see if this product is for you and your family.

 

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Annuities gain attention as Australians age

Below are my comments to “Annuities gain attention as Australians age” by Ruth Liew

Life annuities which guarantee you a life income are now in demand across the world.

Americans who used to buy variable annuities tied to the stock market,are turning more and more to the guaranteed-for-life product which has no variation in income and no further costs.Australians also are joining Canadians who have stepped up their rate of purchase of theses products.

These 3 countries are among the most affected by wild stock market volatility and the non-existent interest rates.The governments have been manipulating both to drive the public into the stock market where many people are nervous.

But where else can they go? The governments know that their public have no choice as a 2% return results in a negative return after inflation and taxes.

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Should you take your pension as a lump sum?

Cashing in a pension or putting it into any investment that is NOT GUARANTEED is foolish in the extreme. Witness the advice from Nathan Parkhouse who is concerned about lower interest rates. He is concentrating on the hole, not the doughnut.
The stock market does not give guaranteed returns. Only an annuity will guarantee a cheque until the day you die.

Annuity Calculator

Online Annuity Calculator

How Much Guaranteed Income Will I Receive?

To find out approximately how much guaranteed income you can expect to receive when you own a life annuity, simply use this easy online annuity calculator.

Annuity CalculatorThe great thing about life annuities here in Canada is that the income you will receive is guaranteed. For life. Depending on your individual circumstances, you can also choose to guarantee the income for the joint lifetimes of yourself and your spouse or other family member, or for a specific number of years. Once you own a Life Annuity, you will receive a guaranteed income that will never decrease – no matter what happens to interest rates, and no matter what happens to the stock market. You have no risk, the insurance company takes on all the market and interest rate risk.

No other financial product on the market can make these guarantees and provide them in writing. Not mutual funds, not stocks, not bonds, not municipal funds, not bank GICs. All of them are subject to interest rate or market risk, or they could be reduced to zero if you live too long. Only life annuities can specify and promise a guaranteed income – for life.

Try our online annuity calculator

retirement-planning-deferred-income-annuities

Retirement Planning and Deferred-Income Annuities

Most people today envision a comfortable style of living once they have retired. But the generation of workers that built solid pension plans to fund this anticipated comfortable lifestyle have mostly passed on and the generations that are replacing them are not able to depend on the same type of pension largely due to higher costs.

retirement-planning-deferred-income-annuitiesCompanies are now pitching highly regulated products known as deferred-income annuities, which will allow the individual earner to create their own sense of well-being when they have decided they no longer wish to participate in the worker’s race to the top. Typically, the consumer will pay a lump sum of money to an insurance company or pay into the plan over time, in exchange for a paycheque for the rest of their life.

You have no way of knowing for sure if this annuity purchase is a perfect way of accumulating retirement funds because you cannot possibly predict how long you will live after the distribution begins. Even with taking this unpredictability into consideration, the annuity could be the best answer to providing some form of certainty during the retirement years as it can be guaranteed for life.

For the conservative investor wondering what they will do for a financially secure retirement, bonds will not deliver the returns they need, and equities are too risky for their liking. So then, the annuity fits right in the middle and brings peace of mind since the risk is non existent. Yes, you will need to invest a large amount to generate the income you’re striving for, but the return will be higher the longer you wait to access the funds.

Deferred Annuity Example

Take, for example, a male who purchases an annuity at age 68 and promptly begins to collect a lifetime income of $12,000 a year or $1,000 a month. That is going to set him back about $167,100. View annuity illustration.

Purchasing the same annuity ten years earlier and then waiting until age 68 to make the same $12,000 annual withdrawal would reduce the investment required to $129,139 or $37,961 less. View annuity illustration.

The popularity of annuities means that all the insurance companies issue them.

It’s interesting to note that deferred-income annuities have been around for quite awhile. Historically, they were marketed as a type of longevity insurance to insure against outliving a retirement plan. They were purchased at or near the age of retirement, but withdrawals were postponed until later. The insurance companies are very much in favour of this approach since it gives them capital to work with.

Retirement Income

Purchasing retirement income when retirement is clearly on the horizon requires less guessing. For example, some people will choose to purchase an annuity to fund their basic living expenses, such as housing and food, because they have a good idea of what their income sources might be and then potentially close any remaining gaps with income insurance through an annuity.

Deferred annuities are still considered to be a great deal because they know they will have guaranteed income.

“No matter how good a cook or an engineer you may be, you can’t bake this in your own kitchen,” said Moshe A. Milevsky, a finance professor at the Schulich School of Business at York University in Toronto, who said he would wait to begin collecting until 70, or even later.

Life Annuity Options

It is no secret that there are many people that are sincerely reluctant to part with a large amount of money and, as a result, the insurers help make people a little more comfortable with their decision. A typical example would be if an annuitant dies before receiving withdrawals that the heirs would receive the funds as the annuity owner opted for the cash refund feature. This is a very popular option.

Another factor that should be considered is that the annuitant is relying on the unwavering financial stability of the insurer for many years into the future. However, the insurer is part of the guarantee association of Assuris, that would step in to make the payments.

Taxes

The tax liability will depend on whether the annuity was purchased using after-tax dollars or with registered funds. By purchasing with non-registered dollars, the annuitant gets back benefits equal to the contributions paid in on a tax-free basis since those funds have already been taxed.

If the annuity is purchased with registered or before-tax dollars, then the payments withdrawn will be fully taxable.

Retirement Planning and Deferred-Income Annuities