Annuities – Did You Know That if You Qualify for an Enhanced Annuity You Could Get Up to 40% More Income From Your Pension Provider?
Are you considering retirement but are worried about your income?
It is only normal to worry that your money will run out before you die, leaving you with nothing to cover for your health care expenses and with nothing to leave your loved ones. In fact, this is a common concern.
However, putting a stop to working does not necessarily mean you have to stop earning. Annuities, for example, ensure that you will have an income throughout your retirement, one which you cannot outlive.
What Are Annuities?
An annuity is an investment policy designed to guarantee a retirement income by dividing your funds into regular payments which you can receive monthly, quarterly, twice a year or yearly.
Most annuities also offer a death benefit, which allows you to make arrangements so that your spouse or financial dependents can receive the remainder of your income after you die or a guaranteed minimum.
Aside from this, annuities offer several other features and options, which make them very flexible plans that you can personalize to suit your financial circumstances and needs. They also come with tax benefits since only a portion of your income, the one you withdraw, is taxed, and offer little risk compared to other types of investments.
Types of Annuities
An annuity can be:
Pension or Purchased Life – A pension annuity is purchased using pension funds while a purchased life annuity is bought using a lump sum, usually from personal savings.
Deferred or Immediate – A deferred annuity begins payment at a pre-agreed future date, giving the annuity funds plenty of time to grow while an immediate annuity pays out immediately, usually to provide for health care expenses.
Fixed or Variable – A fixed annuity has fixed rates and no risk while a variable annuity offers flexible rates and risk levels, although it also offers more room for growth. Some companies also offer an indexed annuity which provides a middle ground between the two.
Life or Enhanced – The enhanced annuity is open only to people with a reduced life expectancy usually due to a medical condition while the life annuity is open to all retirees. There is also an impaired life annuity for those with severe or terminal illnesses.
Joint or Single-Life – A joint annuity provides for two people, usually for one investor and his or her spouse while the single-life annuity only provides for one.
With-Profits – With-profits annuities are linked to with-profits funds and as such, can yield higher rates based on an assumed bonus rate.
Investment-Linked – These are annuities linked to fixed interest investments, and are for those who are not afraid to take a substantial level of financial risk.
How To Buy Annuities
If you are considering buying an annuity, you should shop around for the best one instead of going with your pension provider. You should also get in touch with an annuity adviser.
Although you can do your own research and purchase an annuity on your own, it is better to have a financial adviser to guide you so that you can choose the right type of annuity and the right annuity provider.
By filling up our no-obligation form here, you can avail of expert advice and assistance from one of our financial advisers who will give you all the information you need on annuities and truly help you have the best retirement income.
Please note: We offer a free no-obligation annuity company comparison service. Indeed, by taking a few seconds to provide us with some information, we can arrange for an annuity adviser to contact you and give you free quotes and advice on how to find the best annuity rates.