Annuities and GICs

Canadians today are enjoying a healthier and more active retirement. We are living longer and may spend as much time in retirement as working. Turning savings or RRSPs into retirement income is a major financial decision that affects the rest of our lives. It’s important to have clear, long-term goals in mind for retirement and consider all future income sources so that you can use your retirement savings to do what you want to do most.

What is an annuity?

An annuity is like a mortgage payment in reverse. Instead of borrowing money, you are investing money with a financial institution. With a simple, one-time deposit, the institution will make regular income payments to you that contain both interest and principal. But, unlike a mortgage that ends after a specific period, annuity payments can continue for the rest of your life, no matter how long you live.

People with various needs and financial goals choose annuities. Some examples of people who typically purchase annuities include those who:

  • require a dependable stream of income for life,
  • require a dependable income for a specific time period,
  • are not interested in making on-going investment decisions and want a simple investment,
  • don’t want to worry about outliving their income, or
  • want to diversify their investment portfolio.

Life Annuities

Life Annuities will provide you with a guaranteed regular income for the rest of your life, no matter how long you live. Life Annuities can be purchased as a single life, which is based on one person’s life, or as a joint and survivor life, which is based on the lives of two people. Life Annuities can be purchased with or without a guarantee period.


Bert and Barbara are retiring this year and want to ensure they have regular income from their investments for the rest of their lives. After discussing this situation with their financial advisor, they decided to invest a portion of their RRSP savings in a Joint and Survivor Life Annuity. By purchasing this type of Life Annuity, they have guaranteed a retirement income until the last spouse dies. Now Bert and Barbara have the added comfort of knowing they will receive a dependable income for the rest of their lives, no matter what happens.

Term Certain Annuities

Term Certain Annuities provide investors with a guaranteed, regular income for a selected period of time. Once this period is over, income payments cease and the annuity contract ends.


Marv and Betty are retired and looking for a way to help fund their daughter’s living expenses in British Columbia for the next five years while she is going to medical school. After discussing the situation with their financial advisor, Marv and Betty decide to invest in a 5-year Term Certain Annuity. By purchasing this type of annuity, Marv and Betty don’t have to worry about funding income for their daughter from their other investments and can better enjoy their retirement.

Prescribed Annuities

Offer potential preferential tax treatment if you are investing in annuities using non-registered funds.

What is a GIC?

Guaranteed Interest Contracts (GICs) provide you with key benefits you’re looking for:

  • A solid foundation for your investment portfolio – reducing overall portfolio risk and providing you with more consistent returns.
  • A positive rate of return – guaranteeing that at least part of your portfolio is continually growing.
  • Peace of mind – you’ll rest easy knowing that your principal is safe and secure.
  • A broad range of investment choices:
    • Basic
    • Laddered
    • Escalating Rate
    • Market Growth
    • Daily Interest Account

How you benefit:

  • Provides you with a wide range of flexible options for payment frequency, payment amounts, withdrawal orders and withholding tax.
  • Ability to change your payout options as your needs change.
  • Greater access to your money with additional 10% free annual cash withdrawals.
  • Automatic payments are conveniently deposited to your bank account.