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Apr 01 2014

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Annuity Payment Estimator

 Annuity Payment Estimator

This article provides a rough guide on how much an annuity pays based on several factors. Step by step instructions for the annuity payment estimator are provided below the table plus a example. Please note that this information is current as of the date and time posted and is subject to change without notice.

 

Non-Registered Annuities Registered Annuities
Single Life – Male Single Life – Female Joint Life Term Certain Single Life – Male Single Life – Female Joint Life
No Guarantee No Guarantee No Guarantee 3 Years No Guarantee No Guarantee No Guarantee
5 Years 5 Years 5 Years 5 Years 5 Years 5 Years 5 Years
10 Years 10 Years 10 Years 10 Years 10 Years 10 Years 10 Years
15 Years 15 Years 15 Years 15 Years 15 Years 15 Years 15 Years
20 Years 20 Years 20 Years 20 Years 20 Years 20 Years 20 Years
25 Years 25 Years 25 Years 25 Years 25 Years 25 Years 25 Years

 

Step-by-Step Instructions

Step 1: Are you considering a registered or non-registered annuity? A registered annuity means using money from an individual RRSP (Registered Retirement Savings Plan), locked-in RRSP, pension plan or deferred profit sharing plan (DPSP).  A non-registered annuity would be using money from a savings account or perhaps proceeds from the sale of a home.

Step 2: Do you want the payments based on your life only, your spouse or based upon you and your spouse. 

Step 2A: There is one column entitled “term certain”. Term certain annuities pay a periodic income for a specific predetermined period of time or number of payments. After that point, there are no further payments, so it’s not based upon your life expectancy.

Step 3: In each column, you will see blue hyperlinks which are either “No Guarantee” or for a set number of years.  This is the length of years that the annuity guarantees to pay at a minimum. For example, if you select a 10 year guarantee and you were to pass way after seven years, the remaining three years of payments would go to your beneficiary that you designate.

Example: Based upon the time of this article, I chose a non-registered annuity, for a single-life male with a 10 year guarantee period. So I clicked on the link, that is circled in red. 

Annuity Table A

 

And the table below is displayed. It shows the monthly income based on a investment of $100,000.00. Payments will commence in one month. So in the example, for BMO Insurance, a 60 year old male investing $100,000, would receive $489.52 per month. It also show payments for other ages.

Annuity table

 

Conclusion

I hope this gives you a rough idea of what an annuity may pay.  Please note that I provide annuity quotes free of charge for ll the large Canadian Annuity providers, so if you have further questions, please click on the “Ask a Question” box and I will contact you to verify the information for your personalized quote.

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