Many Canadians are anxious about having enough money to cover expenses in retirement and the effects of market volatility on their retirement savings:
- Almost 1 out of 5 Canadians (19%) surveyed are not at all confident that they will have enough retirement income to cover basic expenses.1
- Almost 2 out of 5 Canadians (39%) surveyed are concerned about the possibility of losing some of their retirement savings due to stock market downturns.2
These findings reveal the opportunity to promote secure income and the investments they’ll use towards retirement. A large majority of Canadians want more guarantees when it comes to their retirement income.3 Yet only 16% of Canadians surveyed expect to receive that income from a tried and true source of guaranteed payments: life annuities.4
Searching for answers
Canadians are using online search engines to look for annuity calculators and information about annuity products.
The following marketing materials will help you explain to clients how life annuities can be a crucial component of retirement income plans, providing peace of mind about how to pay for their retirement.
1. Annuity calculator
Show your clients easily how they can get an estimate of the lifetime guaranteed income they’d receive from a life annuity by using the consumer-facing Sun Life Annuity calculator. It also recommends readers contact their advisors for a quote personalized for their needs.
Using this tool can increase awareness about the benefits of payout annuities. During retirement portfolio conversations, show the importance of having lifetime guaranteed income by putting numbers’ proof in front of clients.
- Compare the income from a life annuity to the income from a GIC or a registered retirement income fund (RRIF) investment portfolio at different assumed rates of return.
- Help clients understand the tradeoffs between annuities, GICs and RRIF investment portfolios, and emphasize how life annuities can provide the highest level of lifetime guaranteed income, when compared to other guaranteed income-generating investments.
- Start a retirement income conversation by recommending clients consider putting 25% of their retirement savings in a life annuity, leaving 75% for liquidity and growth.
To provide more detailed and personalized results, specific to their financial and lifestyle situations, use the Payout annuity illustration tool.
2. Money for life whiteboard video
Encourage your clients to watch the easy-to-understand video, Getting ready for retirement – covering the basics. This Money for Life video focuses on the key benefits of a life annuity as a source of lifetime guaranteed retirement income, including how the income can last longer than the income from a RRIF.
The video also highlights how a life annuity can help cover basic expenses in retirement, and that decreases in market value won’t affect income from this product.
3. Act now — before taxes increase
Purchasing a life annuity is a great way to provide the highest level of lifetime guaranteed income and when clients use non-registered money, there are important tax advantages.5 However, with tax changes coming January 1, 2017, there’s even more incentive for clients to buy in 2016.
At the start of next year, the formula to calculate the taxable portion of each income payment from a non-registered life annuity is being updated. The change won’t affect the amount of annuity income, but it will mean higher taxable income for single and joint life annuities purchased on or after January 1, 2017.
The following materials will help you understand and explain everything you and your clients need to know about this tax event:
- A new client-friendly information sheet explaining the upcoming prescribed annuity tax changes.
- An advisor-facing information sheet summarizing the changes and benefits.
- The article 2017 tax changes to drive prescribed annuity sales in 2016 summarizes 3 benefits of buying a payout annuity now: tax advantages, guaranteed income and longevity protection.
Your clients deserve guaranteed retirement income — money that will last as long as they live, especially since Canadians are living longer.6 Show them the benefits of adding a life annuity to their retirement plans, sooner than later.
For questions regarding payout annuity sales strategies and marketing materials, please contact your Sun Life Wealth sales team.
You might also like…
- Build savings as one pillar of a solid retirement income plan
- 2017 tax changes to drive 2016 prescribed annuity sales
- Grandfathering life insurance policies — steps to take in 2016
1 2015 Sun Life Canadian Unretirement Index
2 CANNEX/Greenwald & Associates, Canadian Guaranteed Lifetime Income (GLI) Study, September 2015. Top 3 box scores. 1015 participants, ages 55-75. Investable assets $100,000+.
3 4 out of 5 Canadians want more lifetime guaranteed income than they’ll receive from government benefits, Canadian GLI Study, September 2015.
4 Canadian GLI Study, September 2015.
5 A life annuity must meet certain criteria to qualify for prescribed taxation. Most Sun Life Payout Annuities sold to individuals qualify.
6 According to Life Insurance Mortality Table, Canadian Institute of Actuaries, modified for Sun Life Financial experience: average life expectancy of men age 65 is 87; 2 in 5 will live to age 90. Average life expectancy of women age 65 is 88; Half will live to age 90.