Samantha, a 65 year old retiree, has a $600,000 super lump sum with which to provide for
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Samantha, a 65 year old retiree, has a $600,000 super lump sum with which to provide for her retirement income. Based on her life expectancy of 22.70 years, we advise her to purchase a 24-year annuity indexed at 3% p.a and payable monthly in arrears. She can purchase an annuity with these features at a yield of 3.85% p.a. effective.
Find the annuity unit cost and hence the dollar amount of Samantha’s starting annual annuity.
What issues need to be considered when buying an annuity as a retirement income stream product?
Related Book For
Canadian Income Taxation Planning And Decision Making
ISBN: 9781259094330
17th Edition 2014-2015 Version
Authors: Joan Kitunen, William Buckwold
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