Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
50% - Moderately

Payout Phase

Synonyms:annuity income period, annuity income phase, annuity payout period, annuity payout phase, annuity period, annuity phase, income period, income phase, payout period
Filed Under: annuities, financial-banking, investments, taxation
Tags: annuity, banking, investment, taxes

Definition of payout phase

payout phase
1. The phase of an annuity where income payments begin to be made to the annuitant, usually in monthly instalments. Income payments received in the payout phase of an annuity are taxable, but because of the tax-deferred nature of annuities, the annuitant will generally be retired, and consequentially in a lower tax bracket, by the time payments are received. Also known as the "income phase" or "annuity phase."

Related Terms and Acronyms:

  • accumulation period (AP)   The period where an investor continues to put money into his or her investment(s).
  • annuity   A financial instrument that disperses a number of payments over a set period of time.
  • annuity certain   A type of annuity that makes payments to the annuitant for a set term; payments stop when the agreed upon term ends, even if the annuitant is still alive after the term ends.
  • instalment   The regular periodic payment that a borrower agrees to make the lender.
  • life expectancy method   A method of calculating the appropriate size of payments in an annuity's income phase by estimating the annuitant's life expectancy.
  • private annuity   An arrangement where one party agrees to transfer ownership of an asset to another party (usually a beneficiary) in exchange for lifetime payments.
  • split-funded annuity   Two annuities purchased together, one with a deferred payout and the other with an immediate payout.
  • substandard health annuity   An annuity with increased income payments for people with shorter life expectancies due to medical conditions.
  • tax deferred annuity (TDA)   A type of annuity where taxes are deferred until the annuitant decides to withdraw money from the annuity.
      ➥  More commonly known as a Tax Sheltered Annuity (TSA).
  • tax sheltered annuity (TSA)   An arrangement where employees are given the option to make tax-deferred contributions to an annuity set up by their employer.
      ➥  See also Tax Deferred Annuity (TDA).

More Related Terms and Acronyms

Search the Glossary

Mortgage Rates
When it comes to mortgages, low rates are king. Come check out our greatest mortgage rates and see how much you can save.
Mortgage Rates
Mortgage Payment Calculator
Did you know that you can save over $28,000 in interest on a $300,000 mortgage by simply switching to biweekly-accelerated payments? Find out how much you could save on your next mortgage with our new calculator.
Try Our New Calculator
Not All Brokers Offer Great Rates
The majority of brokers in Canada limit themselves to using a small network of lenders. We however, have access to dozens of lenders and the lowest mortgage rates in Canada.
Mortgage Rates