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The Canadians were unfamiliar with annuities

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23rd of January 2018 11:30

Photo : Freepik

Canadians between the ages of 55 and 75 years of age are unfamiliar with annuities, and respond correctly to three questions out of five on average, reveals a survey conducted by the firm Ipsos Reid for RBC Insurance. The score obtained by the respondents is » C » when they were asked about their knowledge.

Moreover, the survey indicates that 62 % of Canadians are afraid of depleting their retirement savings in their lifetime. In addition, 63 % of people surveyed said that they know that an annuity provides a predictable income for life regardless of market fluctuations. Despite this, only 12 % say they have taken or intend to take out an annuity to live the life style wish.

A predictable income

«An annuity provides a predictable income for life, underlines Jean Salvadore, director-general, Insurance-wealth, RBC Insurance. It is particularly useful if you want to cover certain fixed expenses throughout retirement, and use the rest of your savings to finance the activities that are important to you. And yet, most Canadians do not know that annuities exist, or misunderstand the product, which explains why very few of them integrate it into their pension plan. «

The survey also raises that 91 % of people surveyed know that they don’t have to invest all their retirement savings in an annuity, and that 72 % know that it is possible to invest in an annuity with their savings in an RRSP or a RRIF. In addition, 63 % say they know that they can stagger their subscriptions, an income to help to increase the payments, and 28 % know that an annuity requires no management after it was purchased.

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