Annuity vs RRIF calculator

It’s a trade-off, not a clear winner. A life annuity converts your savings into a guaranteed income you can’t outlive — longevity insurance — but you give up access to the capital and leave little or nothing to your estate. A RRIF keeps you in control, can be left to heirs, and may grow, but you carry the market and longevity risk: draw too much or live too long and it can run dry. This calculator shows exactly where your RRIF would run out if it had to match the annuity’s income.

Annuity payouts are quoted individually based on your age, sex, the amount, interest rates and any guarantee period, so there’s no single rate — get a real quote from an insurer or advisor and enter the annual income they offer. As a rough starting point, payouts for a 65-year-old have recently been in the mid-single-digit percentages of the lump sum, but use your actual quote, not a guess.

Many retirees do exactly this. Annuitize enough to cover your essential, must-pay expenses (so those are guaranteed for life), and keep the rest in a RRIF for flexibility, growth and your estate. It blends the annuity’s longevity protection with the RRIF’s control — often the best of both.

No — both annuity and RRIF income from registered money are fully taxable, so tax applies similarly to both and doesn’t usually change which lasts longer at a given gross income. Model the tax on your withdrawals with the income tax calculator, and check OAS clawback separately.