| As we mentioned in other articles, the | | | | Annuity payments are fixed for the term of the |
| government only represents about 30% of our | | | | plan and cannot be changed. The payment |
| retirement income, the company retirement | | | | amount is determined by the interest rate for the |
| pension plan offers another 30% and many of us | | | | term and the term chosen, if term is long than |
| do not have one. It is up to individuals to invest | | | | payment will be small, on other hand if the term is |
| wisely short and long term in order to make up | | | | short than the payment will be large. Each |
| for the short fall if he or she would like to live | | | | payment includes principal and interest and only |
| comfortably after retirement without giving up | | | | the interest portion of the payment is taxable for |
| some retirement plan. | | | | the year of receipt. |
| Now you have reached your retirement age, | | | | 2. Non prescribe annuity |
| there are some important investment options for | | | | The taxable interest portion of a non-prescribed |
| your RRSP or 401k plan. In this article, we will | | | | annuity decreases annually. Therefore, taxes paid |
| discuss characteristics of non registered annuity. | | | | are higher during the first few years, gradually |
| An annuity is non-registered when it is purchased | | | | decreasing to zero over time. |
| with funds from money other than registered | | | | 3. Prescribe annuity |
| plan. Payments made under a non-registered | | | | Payments contain capital and interest income in a |
| annuity contain your principal and earned interest. | | | | ratio that can not be changed and the tax |
| Only the interest portion is taxable each year. | | | | payable is spread out evenly over the entire |
| 1. Non-registered fixed term annuity | | | | duration of the contract. |