When you retire, you know that you’ll need your savings to live on for 20, 30, or more years. As a result, you may hesitate to invest in equity mutual funds or the stock market. But if you stick to Guaranteed Investment Certificates (GICs), you may not get enough growth. You run the risk that you may outlive your savings.

The answer? Some people combine an annuity and a retirement income fund. You can:

1.  Split your pension and/or retirement savings between a life annuity and retirement income fund.

2.  Start off with a retirement income fund, and switch to an annuity later.

Each strategy has pros and cons. You will need to evaluate them carefully, based on your own situation. Learn more now.

Should I buy both an annuity and a retirement income fund?

Before you decide, consider your total financial picture, your goals, and your need for safety. Ask yourself:

• What counts most for me: Security, income, growth, building an estate? How would I rank these priorities?
  
• How much fixed income will I get from my government and workplace pensions?
  
• How much of my income do I need to generate from my own savings? What savings do I have to invest? (for example, money in a defined contribution pension plan, Group Registered Retirement Savings Plan (Group RRSP), or an individual RRSP)
  
•  What part of my savings do I want to be able to draw on in case of an emergency?
  
•  How important is it to me to leave money to my estate for loved ones or for charity? Do I have other assets to leave, such as a home or other property? 

Choose an RRIF, an annuity, or a blend? Josef’s story

Josef is turning 69 this year. He’s not sure what he wants to do with his RRSP savings: Buy an annuity, invest everything in a retirement income fund, or do a bit of both. Find out which option he chooses and why. Read Josef’s story now.