Everyone wants to retire with peace of mind, after working for the majority of their lives. This is one of the key reasons why people invest in annuities for a worry-free retired life. So, what is an annuity and how does an annuity work? To put it simply, an annuity is a retirement income financial solution. By investing a sum of money in an annuity, you will be provided with a stream of income payments, once you retire. Your income payments will be based on a variety of factors like your age, current interest rates, length of time that payments are guaranteed and the money invested to buy the annuity.
Annuities are a series of fixed income payments that will be paid to you, over the course of a fixed period or for your lifetime, depending on the type of annuity you have chosen. Most commonly, annuities are paid out either annually, semi-annually, monthly and quarterly. Annuity payments may continue for the lifetime a single individual and his spouse, or for a specified period of time. Annuities are ideal for investors who want guaranteed income from the investments, cover retirement expenses, minimize tax on investment income, and need a steady income after retirement. Most importantly, they are perfect for people who want security and peace of mind in their retirement years. Many insurers offer guaranteed regular income payments in annuities, irrespective of market conditions.
A financial agreement for making periodic payments is an annuity definition. It is the most common form of retirement income for payments to a savings account, or even arranging to make repayments of mortgages. If you are looking to calculate your mortgage repayment, you can refer to a Canadian mortgage calculator.
An annuity formula is used to calculate the payment on an annuity fund that will be received at a future date. Annuities can be purchased with Registered Retirement Savings Plans (RRSPs), pension plans or Deferred Profit Sharing Plans (DPSPs). There are generally two types of annuities – term certain annuities that pay an income for a predetermined period of time, while life annuities pay an income for the lifetime of the annuitant or joint annuitant.
Annuity rates in Canada may differ, depending on the type of annuity chosen and other factors. Most financial service companies will provide you with the details for their specific companies, but if you are looking to do a proper comparison to choose the most ideal annuity for you, then MyMortgageBroker is a good website to check out. Annuities come in multiple forms, so it becomes important to do your homework before buying. The amount of savings that you plan on converting to an annuity is up to you. After all, this is your retirement and you want it to be a happy one.
If you are looking to invest in an annuity or need any more information on annuities in Canada, you should log on to www.mymortgagebroker.com and choose from the various options that have been made available on the website. If you need any further help with the process or have any additional questions, you can contact their customer service representatives between Monday and Friday at 403-870-2669.