A survey conducted by RBC Insurance shows that most Canadians don't know what annuities are or how they work.
While 94% of respondents between the ages of 55 and 75 say they would like to have guaranteed income for life when they retire, RBC's research revealed that 61% admitted they don't understand how an annuity works, and just 35% said they are considering annuities as part of their retirement plans.
The survey also found that 58% of Canadians are worried about outliving their retirement savings, and 22% do not think that government pension plans will provide them with sufficient retirement income.
"Outliving retirement savings and having enough income in retirement are real concerns as Canadian retirees are living longer and are more active in their retirement years," says Parul Vora, head of wealth products at RBC Insurance. "Annuities are an ideal solution to help alleviate some of that financial uncertainty and provide peace of mind and financial stability."