An annuity is a contract purchased with a lump sum that provides a constant and guaranteed stream of payments over a chosen term. There are two types of annuities - Registered and Non-Registered annuities. You'll find more information on both below.
Registered Annuities
There are two types of Registered annuities:
- Registered Fixed Term-to-Age 90.
- Life annuity (available through a Life Insurance company only).
A Registered Fixed Term-to-Age 90 annuity must have a term that lasts until your 90th birthday. At Scotiabank we offer terms of 5-30 years, so if you are between 60 and 85 years of age, the Scotia Registered Fixed Term-to-Age 90 annuity can meet your fixed income payment needs.
Annuity payments are fixed for the term of the plan and cannot be changed. The payment amount is determined by the amount, the term chosen and the interest rate for the term. Each payment is a mixture of principal and interest. The entire payment amount is fully taxable for the year of receipt.
Your Scotiabank Retirement Income Specialist can provide a Registered Fixed Term-to-Age 90 annuity payment quote.
Non-Registered Annuities
There are two types of Non-Registered annuities sold by Scotiabank:
- Non-Registered Fixed Term annuity
- Prescribed annuity
At Scotiabank we offer terms of 5-30 years on all Non-Registered annuities. You are free to select any term, however, a Prescribed annuity cannot extend past your 90th birthday.
Annuity payments are fixed for the term of the plan and cannot be changed. The payment amount is determined by the amount, the term chosen and the interest rate for the term. Each payment is a mixture of principal and interest. With Non-Registered annuities the interest portion of the payment is taxable for the year of receipt.
Your Scotiabank Retirement Income Specialist can provide a Non-Registered annuity payment quote.
With a Non-Registered Fixed Term annuity, initially payments comprise more interest than principal, but as you receive more payments this is reversed. As a result your taxable income is greater with your early payments. This will appeal to an investor who would prefer to have a lower taxable income in later years.
With a Prescribed annuity, your income is treated as equal parts principal and interest. As a result your taxable income is constant over the whole term of the annuity. This will appeal to an investor who would prefer to have a constant taxable income. If you are in a lower tax bracket in the later years of the annuity term, you may realize a tax savings.
For Retirement Income Planning Assistance
To find out more about Scotiabank's investment assistance, please call 1-800-953-7441, or contact your local branch to make an appointment.
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