Annuity Insights- April 2019

I read and do a lot of research to stay up-to-date on topics that I think Canadians will find useful with regards to their financial planning situation. I include education on annuities for all my retiring and pre-retired clients and demonstrate how annuities can be used in their personal situation.

Annuities are an investment product that I feel are underutilized and many Canadians for their retirement. What I am sharing below is a series of articles I have collected over time that I feel you may find beneficial.

Annuities: The Best Financial Product No One Really Wants

Reference September 4, 2012 – Financial Post – Fred Vettese

Here is a timeless article with lots of pros and cons of using an annuity.

Not sexy…”annuities are not sexy. You hand over your money to an insurance company who then puts you on a seemingly stingy allowance for the rest of your life” at least that is the view by many without really diving into learn more about annuities.
There can sometimes be the belief that you might get a better return in the stock market.
Annuities can come with generous survivor income options, if one is prepared to pay for them. Click here to learn about cash refund or guarantee period options
Strategy – if your asset mix is 50% fixed income and 50% equities, consider an annuity with 50% of your portfolio (which is essentially a fixed income product ) and invest the remainder in the stock market. You asset mix remains at 50% fixed income and 50% equities.

The Baffling Unpopularity of Annuities

Reference January 31, 2019 – Save with SPP – Martin Biefer

The key takeaway from this post is that “they are ideal for cash flow. Many people buy an annuity which, along with government pensions, “meets all your non-discretionary needs,” such as keeping the lights on, the furnace going, and the rent paid via the steady, predictable and guaranteed income. And if you convert part of your retirement savings to an annuity, you can “afford to take more risks with the rest of your portfolio.”

Reference: March 26, 2019 The Globe and Mail – Rob Carrick

The key takeaway from this post is that life annuities are only available through life insurance companies and therefore you need to survey each company as payouts do vary between them. As a life insurance broker, I do this for clients to provide them with the best available payout for all providers.

To learn more, enter your first name and email in the green box on this page. You’ll receive a series of short emails with more tips, information and education.[activecampaign form=107]