@calmmoneycoach: The most important number in your retirement plan is the gap between your guaranteed income and what it costs you to live. A life annuity closes that gap permanently. You give an insurer a lump sum. They pay you monthly. For life. A personal pension. I’m not usually a fan of certain types of insurance products but this one can be a great tool to consider with an expert. In 2026, a 65-year-old male in Ontario gets ~$560/month per $100K. Rates are up 20-30% from a few years ago. The engine behind it: mortality credits. When people pool money, those who die earlier subsidize survivors. Milevsky (York University) showed a 75-year-old gets roughly 2x the income vs bonds. No portfolio replicates that. So why does nobody buy one? 72% preferred an annuity described as “guaranteed income for life.” Only 21% wanted it described as “investing $100K for a return.” Same product. Different words. (Brown et al., AER, 2008) Expert consensus: Vettese (~20% of RRSP). Milevsky (“pensionize your essentials”). OECD (partial as default). And once you buy one, optimal equity allocation for the rest goes UP to 95% (Blanchett & Finke, 2018). The annuity replaces bonds. Worth exploring if: no DB pension, withdrawal rate above 3-4%, near OAS clawback, or you want to sleep better at night. Retirees with $3K/month guaranteed spend 2x as much as those withdrawing from savings. Certainty is its own return. (Finke & Pfau, 2024) Not advice. Talk to a fee-only planner. #retirement #annuities #retirementplanning #PersonalFinance #canadianfinance ​​​​​​​​​​​​​​​​

Brian | Calm Money Coach

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Thursday 23 April 2026 23:03:39 GMT