How to Create a Guaranteed Lifelong Income
We found a useful article in the Globe and Mail on creating a guaranteed lifelong income and we want to share it with our community. “Buying a prescribed annuity? Act Fast!” by Rob Carrick is an insightful piece on how to use a prescribed annuity as your financial vehicle of choice, why you should consider owning one and why you should do so today, rather than waiting.
In this article, Mr. Carrick urged consumers to “Act Fast” if you have a readily available sum of money from the sale of your house, as an example, to generate a tax efficient, guaranteed lifelong income by using a prescribed annuity.
A prescribed annuity is an insurance contract where you deposit a lump sum of money into the annuity in exchange for an income that stays with you for the rest of your life, and even the rest of your spouse’s life. In essence, you are creating your personal pension plan.
In the Globe and Mail article “Buying a prescribed annuity? Act Fast!“, it gives an example of how due to tax rule changes coming into effect on January 1, 2017, you are much better off setting up your prescribed annuity this year than the next. Of course, it needs to fit your goal and objectives in your financial plan.
Here are some points to consider:
- Tax efficient
- Stress-free guaranteed lifelong income
- The older the age you start, the greater the amount of income
- The longer you live, the more you will benefit
- Can be inflation proof with indexing of the income available and optional
- Lump sum pays to your beneficiary if you die too soon
- Can be designed to cover the lives of both you and your spouse
- Lessen the effect of potential Old Age Security clawback
- Prescribed Annuities bought this year will be grandfathered against the new tax rules
- Creditor proof because it is an insurance contract
- Prescribed Annuities are set up through your financial advisor, not at the bank
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