annuities
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Thread: annuities

  1. #1
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    annuities

    i got some quotes but when i reminded them i needed the indexed one and what was the inflation limit.
    all i got was in an email was
    "maybe give me a call – as the short answer is yes it is – but done via what we call a “prescribed annuity” which is more tax favorable – and addresses your question – best to chat live – email will miss out on some key points."
    mealy mouthed?

    is there a good website for annuities info?
    thanks


  2. #2
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    Susy Orman website has some info though American

  3. #3
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    For an overall discussion of Canadian annuities see
    http://www.finiki.org/wiki/Annuity.


    For a discussion in this website see
    http://canadianmoneyforum.com/showthread.php/101785-Annuities-HUH-what-are-they-good-for
    Last edited by stantistic; 2017-01-22 at 12:10 PM. Reason: format

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  5. #4
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    annuities. who (whom?) are GOOD for? who (whom?) are they NOT GOOD for? when do they make sense ? when not?
    I'd be interested in comments from cmfers.
    (hope i didn't hi-jack your thread, asker1)

  6. #5
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    A 'prescribed ' annuity is one where the the ratio of taxable income to non-taxable income is the same for the life of the annuity.
    The taxable amount is fairly low but has recently increased. Annuities outside of RRSP are considered tax advantaged.

    Interest rates have been quite low for a long time and may well continue to be in the future. This works against the annuitant
    as his monthly payment will be correspondingly low.

    Your longevity expectations are very important. The longer you live the better. If you do not think you will live a long time,do not get an annuity.

    I do not know if an indexed annuity is easily available in Canada. For sure it is in the US.

    There are different varieties. I am familiar with the kind that are outside the RRSP.
    A single life no guarantee is the simplest. It is for one person.If this person dies the day after buying the annuity
    he will receive no monthly payment.The payments for this type are the highest.

    The guaranteed type provide for a payment to the estate for a certain number of years.

    There are also spousal annuities. After one person dies, the spouse will receive the annuity until the end of her/his life.

    There is also the question of at what age one should annuitize. The older, the higher the monthly payout

  7. #6
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    thanks wraphter.
    another question/ topic: what are the do's or don'ts regarding considering converting (is that the right word?) RRSPs to annuities on turning age 71?

  8. #7
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    thanks everyone
    we do not have to leave an estate, so live well die broke is an idea

  9. #8
    Senior Member GreatLaker's Avatar
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    Quote Originally Posted by jargey3000 View Post
    annuities. who (whom?) are GOOD for? who (whom?) are they NOT GOOD for? when do they make sense ? when not?
    I'd be interested in comments from cmfers.
    (hope i didn't hi-jack your thread, asker1)
    Annuities are an insurance product that gives protection against outliving your money (longevity insurance). If you are not worried about outliving your money you don't need an annuity. IMO the following people don't need annuities:
    • Wealthy people that have enough funds they can never envision outliving their money even under the worst economic conditions.
    • Lower income people for whom (not for who ) govt pensions (CPP/OAS/GIS) provide all their non-discretionary expenses and their savings are for discretionary expenses only.
    • People that have good, well funded DB pensions (especially indexed) that cover all their expenses, typically govt employees or public service union members.

    None of the above people have to worry about outliving their money.

    People that should consider annuities are the in-between wealth people that depend on their savings for non-discretionary expenses. An annuity can be used to build a layer on top of CPP/OAS, DB pension money etc so all the retiree's non-discretionary expenses are covered for life. Another benefit is it removes some of the risk of mismanaging your money if age related dementia sets in.

    Need to find that elusive balance between guaranteed income from annuities vs. keeping your own funds invested. I plan on considering it around age 70-75.

    Jim Otar's book Unveiling the Retirement Myth has extensive information on annuities, unfortunately it is a bit hard to find.
    Eschew obfuscation. Espouse elucidation

  10. #9
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    Just google "Jim Otar's book Unveiling the Retirement Myth", and there is a pdf available.

    Cheers

  11. #10
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    Here's another article with the basics ...
    http://www.moneysense.ca/save/retire...out-annuities/


    Cheers


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