Do you have enough money to retire? Are you worried about out living your money? These fears are not uncommon. The combination of stock market uncertainty, increased longevity, and rising interest rates throughout the past year have made annuities more appealing. The demand for annuities and their payouts has increased dramatically over the last year.
Annuities are predictable, tax-efficient, and provide guarantees making them an attractive part of a retirement plan. Typically, when interest rates rise, so do annuity payments. We have seen this happen over the last 18 months. Data provided by CANNEX and the Investment Executive show annuity payouts for a 65-year-old male increase by 20.5% from January 2022 to February 2023.
Annuities can bolster a financial plan by providing an uninterrupted and indefinite income. Features can also be added to protect against inflation. With interest rates where they are, maybe it is time to look at an annuity to de-risk your retirement plan and lock in income for the rest of your life.
BMO Insurance has written a good article with information on the myths, facts and benefits that surround annuities. See the attached link. It is worth the 4 minute read. https://www.bmo.com/insurance/learning-centre/annuities-101/
For more information on this and other insurance matters, please reach out to me at deb@dglifeinsurance.ca
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