Time to retire: Why are RRIFs preferred over annuities?
You can use your RRSP or a portion of it to purchase a guaranteed fixed income or indexed annuity, to age 90 or for life. Annuities offer a guaranteed income stream, which is reduced by today's low interest rates. Alternatively, RRIFs let you invest in equities and develop a balanced portfolio with the potential to increase your income over time. Upon death, you can leave any remaining assets to your designated beneficiary. Compared to the more fixed income from an annuity, RRIFs provide more flexibility if you need more retirement income in a particular year.