What is a Prescribed Rate Annuity?

Annuities, Calgary

One of the challenges for creating retirement income is that interest rate yields have dropped so much over the past 30 years and now taxes are increasing - it's what we call adding 'insult to injury'. If you are over the age of 60 this is something that you may want to consider as a way to set up a guaranteed income stream for life. A guaranteed source of income is great for your fixed expenses like property taxes, vehicle registration, insurance, medical expenses, annual vacation, grandkids education, etc. There are other features you can add to an Annuity like joint life survivor, 10-year payout to a beneficiary and fixed term.

What is a Prescribed Annuity?

A Prescribed annuity is set up in such a way that a portion of your income is a return of your capital and a portion taxable interest.Bill is aged 65. If Bill were to buy a Prescribed Annuity Contract he could use his $100,000 to earn an income of approximately $5906.00/yr. (the amount is based on age and gender). So, in Bill's situation, he would only pay taxes on $980, at a 30% tax rate that would only be $294.00. That means Bill would be getting $5612.00 a year from his annuity for the rest of his life.

Who would benefit from a Prescribed Annuity?

  • Someone who is 60+ and looking for a guaranteed source of income that will last the rest of your life
  • You have some non-registered money sitting in a GIC or cash at the bank
  • You do not want all of your investments exposed to the volatility of the stock market 
  • You want to minimize the tax payable on your income
  • Consider the following Example below:

Want to retire in the next few years? Would you like to work with a Retirement Planner who specializes in investments that produce lifetime income?

We specialize in fee-only planning helping our clients get their financial house in order and retire more confidently with purpose and peace of mind. Click here for more information on our services and pricing.

 
 
Retirement Income & Investment Planners,

Willis J Langford BA, MA, CFP

Nancy R Langford CRS

587-755-0159


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If you are nearing retirement, newly retired, or well into that stage of life and need some honest, reliable financial advice and tax planning services, I highly recommend Willis and Nancy Langford at Langford Financial. I have been working with them since the fall of 2020 and am really happy I made the switch.

I needed much better advice than I was getting from my new bank rep as I was actively preparing for retirement. I found Langford Financial online and booked a review meeting. I was happy that I was sent a complete list of all the information that would be needed prior to my initial meeting so I arrived prepared.

From that initial meeting, I decided to have Willis prepare a retirement plan for me. After we reviewed everything he had prepared, I felt much more confident in what was to come financially during retirement and how I could manage it. That's when I decided to transfer my investment portfolio from my bank to Langford Financial so they could manage it with and for me. I felt they really had my best interests at heart.

It was a pleasant surprise that their approach combined both income planning for retirement and tax planning for both the immediate future and well into retirement. This has proven to be very helpful as it has ended up saving me a lot of money (a lot!) by using credits that had been missed by the company I previously used to prepare my taxes.

I really like working with Willis and Nancy. They are very quick to answer any questions I have and can accommodate virtual or in-person meetings based on what is needed. They also produce a regular newsletter that I really enjoy. It has lots of tips in it and some very good in-depth information that helps me make better decisions---or at least ask better questions!

Moving to Langford Financial was a great decision for me. It has lead to better financial planning and decision-making and much greater peace of mind for me at this time of life.
 
 
 
Sharon Stroick
Full Service Client Since 2020

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