Annuities – Ottawa, Ontario
Annuities are contracts sold by an insurance company which provide guaranteed regular payments to the policy holder during retirement.
Individuals invest funds in the annuity, which are locked in and grow interest for an established period of time. At the end of the term, the annuity pays out a specified amount of money at defined intervals.
Annuities and their interest are not taxable until the funds are withdrawn from the account.
There are two types of annuities:
- Fixed annuities guarantee a specific payment amount.
- Variable annuities do not guarantee the payment amount, but have the potential for greater returns if the market is performing well.