Canadians who are worried that they will outlive their retirement savings now have something to fall back on.
The federal budget, released March 19, introduced a solution to retirees who fear possibly outliving their money. It is called the Advanced Life Deferred Annuity (ALDA), which is an investment option available to those who have RRSPs, RRIFs or other registered plans like the Defined Contribution (DC) pension plan, reports the Financial Post.
ALDA allows up to 25 percent of an individual’s registered investment accounts to be used to purchase an annuity that begins payments by the end of the year that they turn 85. There would be a lifetime maximum of $150,000, indexed to inflation, the Post reports. ◊