Riscario

compare with a prescribed annuity

• heavier tax burden in early years
• interest portion is like a mortgage (early payments mainly interest, later payments mainly capital)
• as annuity grows and annual income is taxed, corresponding adjustment to annuitant’s ACB
• interest on loan to buy annuity for business or investment income may be tax-deductible
• same total amount of taxable income as a prescribed annuity, but the timing differs