Which should I choose – RRIF or Annuity?

Congratulations, your last day of work has finally arrived its time for Retirement!
Now what?
What are you going to do with all the free time?
What will you do with your RRSP and other retirement savings to keep money coming in so you can do those things?
Remember that the government only represents about 30% of our retirement  income, your company or public service retirement pension plan offers another 30% and many of us do not have one. It is up to you to invest wisely, short and long term in order to make up for the short fall if you would like to live comfortably after retirement without giving up some retirement plans.
Now you reach the year of RRSP conversion year, you are facing the choice to choose either to convert your registered retirement saving plan to RRIF or annuity. I will shed some light and discuss the advantage and disadvantage of RRIF and annuity.

If you qualify for the following sources of retirement income, you would be wise to consider an RRIF

1. Old Age Security (OAS).  2. Canada Pension Plan (CPP).  3. A pension plan.  4. Other non-registered assets.
You would be wise to convert some of your RRSP into RRIF because you will be better able to afford the flexibility and control for tax-and estate-planning  purposes that a RRIF allows because your monthly incomes are guaranteed by four sources above.
You may consider staggering maturity so portion of your investment in RRIF will generates the necessary cash flow for withdrawals such as buy GICs or bonds so that 20% of the total matures every year.
In RRIF, you are allowed to invest up to 100% of your investment funds in global investments, thereby increasing your investment’s long-term growth and protection. You also protect your investments against any future declines in the value of our Canadian dollar. Besides, it is far more risky to leave all your eggs in any single country.
Be sure to consult with an independent adviser to help you in building your investment plan, explore all your options and review your plan at least once each year.
If you don’t qualify for four of the retirement income sources
You might want to use at least some RRSP funds to buy an annuity as a foundation for your retirement income plan. This provides guaranteed income to cover your minimum retirement income needs.
If you would like to get a Annuity quote click here or would like to sit down and have some help figuring out which option works best for your situation, please call me at 613.286.6841 or e-mail me info@AndrewWBradley.ca.
The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. I recommend that you obtain your own independent professional advice (preferably me) before making any decision in relation to your particular requirements or circumstances.