Annuities
Invest today to provide a reliable source of income in the future.
Why do I need an annuity?
After years of hard work, you deserve a rewarding retirement. But it takes planning to reach that goal and traditional sources of retirement income are decreasing. In the past, Canadians could count on three sources of retirement income – company pension plans, personal savings and government pension plans1. But today, only 39.7% of paid workers have a company-sponsored pension plan1 and 55% of Canadians are concerned they will not have enough funds to live comfortably during retirement.2
To safeguard against the risk of outliving your assets, you may want to consider an annuity.
What is an annuity?
An annuity is a contract issued by a life insurance provider that guarantees a steady stream of payments at some point in the future. Annuities have two phases:
- The accumulation phase, during which you contribute to your annuity and your investment grows as interest is credited.
- The payout phase, when the investment you have accumulated is paid out to you.
The size of the payments you receive from your annuity will depend on the size of your investment and the length of time that investment is held. Annuities can be registered as part of your Registered Retirement Savings Plan (RRSP) so that contributions are tax-deductible and your funds grow tax-deferred.3 You can also hold an annuity in a Tax-Free Savings Account (TFSA) where your investment earnings will accumulate tax free.
| Annuity Plus4 | Annuity Plus TFSA4 |
|---|---|
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Overview Annuity Plus can provide a reliable source of future income in exchange for a premium or series of premiums. |
Overview Annuity Plus TFSA lets you save for your future with interest earnings that accumulate tax free. |
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Best for Conservative investors with a need for guaranteed investment growth. |
Best for Conservative investors with a need to protect investment earnings from taxes. |
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Key features A choice of daily or guaranteed investment options |
Key features A choice of daily or guaranteed investment options |
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Interest accounts Daily Interest Account (DIA) |
Interest accounts Daily Interest Account (DIA) |
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Minimum deposit DIA: $50 |
Minimum deposit DIA: $50 |
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Maximum deposit $250,000 lump sum deposit (without prior approval) |
Maximum deposit $6,000 per year |
|
Fees No |
Fees Withdrawals may be subject to |
| Annuity Plus4 |
|---|
|
Overview Annuity Plus can provide a reliable source of future income in exchange for a premium or series of premiums. |
|
Best for Conservative investors with a need for guaranteed investment growth. |
|
Key features A choice of daily or guaranteed investment options |
|
Interest accounts Daily Interest Account (DIA) |
|
Minimum deposit DIA: $50 |
|
Maximum deposit $250,000 lump sum deposit (without prior approval) |
|
Fees No |
| Annuity Plus TFSA4 |
|---|
|
Overview Annuity Plus TFSA lets you save for your future with interest earnings that accumulate tax free. |
|
Best for Conservative investors with a need to protect investment earnings from taxes. |
|
Key features A choice of daily or guaranteed investment options |
|
Interest accounts Daily Interest Account (DIA) |
|
Minimum deposit DIA: $50 |
|
Maximum deposit $10,000 per year |
|
Fees Withdrawals may be subject to |
412593 CAN (10/22)
1 Statistics Canada: Pension plans in Canada as of January 1, 2021.
2 Healthcare of Ontario Pension Plan, 2022 Canadian Retirement Survey
3 Foresters, their representatives and employees, do not give legal or tax advice. The information given here is merely a summary of our understanding of current laws and regulations. Prospective purchasers should consult their financial, estate, tax or legal advisor regarding their situation.
4 Underwritten by The Independent Order of Foresters.
2 Healthcare of Ontario Pension Plan, 2022 Canadian Retirement Survey
3 Foresters, their representatives and employees, do not give legal or tax advice. The information given here is merely a summary of our understanding of current laws and regulations. Prospective purchasers should consult their financial, estate, tax or legal advisor regarding their situation.
4 Underwritten by The Independent Order of Foresters.