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Old 02-07-2020, 04:28 PM   #1
bizaro86
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Default ADLA and Annuities for Retirement Income

I thought this might be a good topic for this forum, as it is kind of a new thing. Annuities appeal to because they are a way to deal with longevity risk (aka outliving your money) but the guaranteed low returns are less appealing. I like a deferred annuity better, because it should presumably be less upfront money for the same longevity guarantee.

My understanding of the new rules is that you can buy annuities to defer 1/4 of your rrsp to payments starting at 85 (150k max). I'd be interested to hear reports on whether anyone is considering this or how competitive the market is from the insurers.
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Old 02-07-2020, 05:48 PM   #2
Slava
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I have had a few clients look at annuities in general for their retirement income. The general idea is using this as a piece of the retirement income, but not the entire thing. The reality is that with interest rates as low as they've been though, it's not that attractive.

There are all kinds of configurations and options when it comes to these products. Some are indexed, some are guaranteed for a certain period and some are bare bones with nothing of that nature. I find most of the pricing among the companies has been pretty competitive and I don't see huge outliers. They're all using the same information and mortality tables, so it makes sense that rates are close.
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