Flat money icons1/11/2024 ![]() ![]() “With Canadian bonds down double digits, conservative investors who lost double digits on their bond portfolio are maybe thinking more about annuities as a true guarantee of fixed income as opposed to bonds, which do have some interest-rate risk,” Heath said.Ĭlients interested in annuities typically only direct a portion of their retirement assets to the purchase of a regular payout, Heath said. Heath said he’s met with clients who see annuities as an attractive alternative to determining the appropriate amount to draw down from retirement savings for expenses, or to managing their own retirement investments. However, as the Bank of Canada, as well as other central banks globally, began hiking rates in the spring of 2022 in response to rising inflation, client interest in annuities began to increase.Īs of February 2023, the monthly payout on a single-life annuity with a premium of $100,000 and a 10-year guarantee were up more than 20% compared to a year before. Over the previous three decades of low interest rates, clients largely spurned annuities, which offered relatively meagre payouts. Yet “the same people who might be jealous of retiree with a pension would never think of giving their money away to an insurance company to buy what is effectively a pension of their own,” he said. However, some clients get cold feet when they realize that buying an annuity means handing over a significant sum in return for the guarantee of periodic lifetime payments, Heath said. ![]()
0 Comments
Leave a Reply.AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |