If you wanted to generate stable monthly income from a non-registered investment, you would most likely invest in a fixed income product like a GIC correct? The problem with this strategy is that any interest income generated from a GIC is 100% taxable. This reduces the amount of monthly income available to you.

Instead, why not consider the “Insured Annuity” strategy? This strategy is designed to give you a higher after-tax income than a GIC investment, while at the same time preserving your capital for your heirs.

There are two parts to the strategy. The “Annuity” part is made up of a Prescribed Annuity Contract, widely available in the Canadian marketplace. The “Insured” part, is made up of Term to 100 Life Insurance. Here's how it works…

You invest your surplus non-registered capital in a prescribed annuity contract. The Annuity will provide you with guaranteed lifetime payments which get preferential tax treatment compared to other guaranteed products such as a GIC. You are already saving tax!

Next, you take out a Term 100 Life Insurance policy with a death benefit equal to the amount you invested in the Annuity. The monthly insurance premiums are paid from the income generated by the Annuity, with enough left over that you still end up with more after-tax monthly income that you would with a GIC investment. Upon your death, your initial investment is paid out to your heirs tax-free.

To learn more about this simple strategy, and see if it will work for you, give us a call or send us an e-mail and we'd be happy to discuss it with you.

Yours truly,

Tactical Asset Management, Inc.
phone: (306) 757-2121
fax: (306) 347-3655
e-mail: inquiry@tacticalassetmgmt.com
website: www.tacticalassetmgmt.com