Your retirement has finally come around and on the one hand you are quite excited but on the other you are a like a scared rabbit in the headlights.You only retire once so it is very important to ensure that you get the best annuity rates from your pension pot.
You have saved in your pension all your life and now you have to exchange it for an annuity.Annuities have many options and you have to choose which are the most important to you.These are the options:
>> Frequency of income
>> Income paid in advance or in arrears
>> Increase in Payment (Escalation)
>> Partner’s Pension
>> Tax Free Cash
>> Guarantee periods
Each of these options reduces your starting income with your annuity,but they could be important.If you have a spouse and he/she has no income of their own, how they will,manage financially if you die.You may need to consider this and purchase a continuing pension for them.
As well as considering these options you will need to consider if you might be entitled to Impaired Life/Enhanced Annuities-If you have medical problems,or have had medical problems in the past,then you could qualify for a better annuity as your life expectancy may be affected.Annuity providers do consider the life expectancy when they calculate annuity rates.
If you’re a smoker then some providers are prepared to offer you more income than non-smokers.
Guaranteed annuities will pay your annuity for the rest of your life but there is no opportunity to profit any further from the pension pot you give to the annuity provider.Investment Linked Annuities offer many of the options of a conventional guaranteed annuity,but with the addition of an investment linking. This could mean that the level of income actually increases over time if the investment grows well,although you do run the risk that the income could actually reduce if the underlying performance is poor.
With any financial product if you are not sure about everything then you should seek independent financial advice from an adviser that specialises in annuities.
Based in the UK, Retirement Solutions are Independent Financial Advisers (IFA) who can find you the best annuity rates using their unique Annuity Calculator and provide whole of market independent Annuity Advice on the best purchased life annuity rates.