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An Annuity is the simplest option to provide retirement income. In exchange for a lump-sum of money, an insurance carrier will provide you with a stream of payments. The income payments you receive are a combination of both interest and a return of principal. These payments are guaranteed to continue for as long as you are alive, regardless of changes to interest rates and market conditions. An Annuity is an excellent investment vehicle for individuals looking for stable retirement income.

Annuities often offer higher income rates than other guaranteed income products. Moreover, since a significant portion of the income payments are actually considered a "return of principal", you will pay considerably less tax on this income. And by reducing your taxable income, you may also reduce your OAS clawback. This makes an annuity an excellent retirement planning vehicle.