Tag Archives: Annuities

Annuity Comparison: How to Find the Best Deal

For some people annuity seems like a dirty word, but really it can be a very useful way of managing your money and getting you through your retirement in a way that keeps you pretty financially stable. In the current economic climate, the thought of financial security or of having a regular income every month is a huge relief, and an annuity can really make that happen; but in order for that to happen you have to find the best annuity deal possible, and at the beginning of your search an annuity calculator can be useful.

Annuities are an investment, but a low-risk investment and in order to calculate what your returns might be it is a good idea to use an annuity comparison table. With an annuity calculator you input your age, gender, post code and any medical information that is asked for and the annuity calculator will give you an idea of the income you might expect to receive and the annuity rate that you will get. And with annuities, the rates that you get are crucial. When you buy an annuity, the annuity provider will use the money they give them to buy government bonds and gilts and the income that you will receive will in fact be the returns from that very investment.

While investments fluctuate at the best of times, an annuity is quite low risk, but it is all about the rate that you get, or put another way, the rate of return that you get. So how then do you find the best deal? It is quite simple. The best and only way to find the best deal is to shop around, most annuity providers have annuity calculators on their websites, and if they don’t have an annuity calculator then you can always phone for a quote. In this way you can get an idea of what you can expect from each annuity provider.

An annuity calculator will give you an idea of what annuity rates you can expect, but the rate is not a guarantee and in order to get a serious quote you will need to move from the annuity calculator to the phone or to a financial advisor. It is up to you to get the best deal for yourself but there are people around whose job it is to help you. So make use not only of the annuity calculator but also of the resources of financial knowledge that you have access to, and if you don’t have one, find one.

What is an Annuity Calculator?

Before we know what an annuity calculator is, we need to know what an annuity itself is. From the moment that you started working you began saving money in your pension; either a pension set up through your employers and/or one that you set up for yourself. You save and save for years but what do you do with that money once you reach the age to start thinking about retirement?

At this stage you will no doubt begin looking into the best ways to make the pension you have saved last you until you no longer need it. There are many options for you to choose from and an annuity is one of them. If you choose an annuity, you will take the capital that you have saved in your pension fund and you will exchange this for an annuity. This annuity will guarantee you an income for the rest of your life. Naturally this is quite a good option because it means that you will have a regular income, most commonly on a monthly basis, but potentially on a quarterly, bi-annual or yearly.

You may like to know what your annuity might be if you chose this option. This is where an annuity calculator becomes useful. An annuity calculator will give you an indication of the income that you might expect to receive from your annuity. What the annuity calculator will give you is only a guide, and should you wish for a more accurate quote, you will need to contact the annuities provider directly.

The annuities calculator will take a number of factors into consideration when estimating your annuity. You will be asked what your age is, and what your sex is. You will also be asked where you live, if you smoke or are overweight. All of these bits of information will be used by the annuity calculator.

If you are pleased with the guide given to you by the annuities calculator then you should consider getting a formal quote. There are a variety of annuities providers, who will offer slightly different annuities and it is best to get quotes from as many as possible in order to make an informed and beneficial choice. Annuities can be extremely useful in setting yourself up for a financially secure retirement, which you will no doubt deserve after years of saving towards your pension.

Use your Pension Fund to purchase a Lifetime Annuity

A Lifetime Annuity is a way to turn your pension savings into an income during retirement. While some annuities last for a fixed period of time such as five or ten years, a lifetime annuity can go on until the day you die. Lifetime annuities can therefore be a way to ensure that your savings provide a guaranteed income for the rest of your life.

There are different ways in which a pension fund can be used for financial security during retirement and annuities are one of them. You can purchase an annuity with a lump sum – which can either be all or part of your pension savings. How much income you could generate depends on the size of your pension pot and how much of it you wish to invest in an annuity. Up to 25% of your pension fund can be released as a tax free lump sum and a large proportion of people use this to invest in an annuity.

How much income you can generate also depends on other factors such as annuity rates, your lifestyle and health criteria etc. Just like enhanced mortgages – there are enhanced or impaired lifetime annuities for people with certain health and lifestyle indicators. A shorter than average life span allows annuity providers to pay out more than they would normally as the expected term of the annuity is shorter than average.

As mentioned earlier, a lifetime annuity is guaranteed to continue generating an income until the end of your life, and as such, can never be completely used up. It guarantees an income for as long as you live – which can be a significant factor at a time when people are living for longer than ever before. There are different types of lifetime annuities – such as level annuities and investment linked annuities.

You can also add additional features to annuities such as protection from inflation, joint annuities for a partner to continue receiving income after you are gone etc. Adding these bells and whistles to a lifetime annuity will affect the income you receive. For instance, inflation linked annuities increase over time – so the income received initially is normally much lower than you would on a level annuity.

Investing in a lifetime annuity is one of the most popular ways to provide financial security during old age. There are many different types of annuities and several annuity providers on the open market – the best way to find an annuity that will suit your individual circumstances is to shop around.

Evaluation of the Risks Associated with Annuities

Annuities have become a popular investment choice for those consumers who are close to reaching their retirement age. There are several reasons why annuities work for many consumers, as they allow for guaranteed income and have several safeguards in place to ensure that the consumer at least maintains a certain level of income once they have stopped working. However, there are also some annuity risks associated with purchasing an annuity, especially certain annuities, as there are a variety of different kinds of annuities currently available to consumers. In order for those consumers approaching retirement to make the best decision available to them, they must know both the advantages and disadvantages to purchasing an annuity in an effort to help them fund their retirement years.

While annuities do guarantee a level of income for a designated period of time that does not mean that the amount of money in question will remain constant over time. That is to say that annuities do not factor in inflation unless the consumer chooses to invest in an inflation-linked annuity. That means that with a standard or conventional annuity, the consumer may end up with less money over time, given the impact of inflation on their pension savings.  That being said, annuities are not all made equal. While the consumer can customize their annuity to some extent, these add-ons and enhancements typically cost more money. So, in order to alleviate some of these annuity risks, the consumer must invest more.

Another annuity risk is that the consumer simply does not have an opportunity to make much money on their investment. Therefore, they cannot continue to build their savings. For example, with a fixed annuity, the consumer is not able to make any money off of their investment. So while the consumer is guaranteed their income, they run the annuity risk of not ever being able to make more money off of their investment. Lastly, annuities are notoriously inflexible. This means that the consumer is unable to make any changes to their annuity, including payouts and enhancements, once the annuity has been purchased. Therefore, an annuity risk exists if the consumer finds themselves in a position where they need to change their retirement options.

Regardless of what the consumer needs and wants, they should always consult with an independent financial adviser. A specialist or expert can ensure that the consumer has all of the information needed to make the best and most unique decision for their particular situation.

Is an Independent Financial Adviser Necessary for an Impaired Annuity?

Many consumers choose to do a great deal of independent research on potential investment strategies once it is time for them to start thinking about their retirement years. All consumers should be doing this kind of research on their own. However, many consumers forget to seek out the independent annuity advice of more seasoned experts in the field. While every consumer should do their own research, that research should be partnered with the expertise and independent annuity advice of an independent financial adviser. There are several reasons for this.

Benefits of Using an Independent Financial Adviser

There are several unique benefits to seeking out the advice of an independent financial adviser. First, and most obviously, an independent financial adviser (IFA) simply knows more about impaired annuities and all annuities in general, than the average consumer. They truly have the independent annuity advice that consumers need in order to invest smartly.

Secondly, independent financial advisers have access to the entire annuity market. This means that they are able to use their knowledge, partnered with what is available in the current market, to better give their consumers educated and independent annuity advice. This means that they are able to get some pieces of information that wouldn’t even be easily accessible by the average consumer. They are able to use that information to better advice consumers who are looking to purchase annuities.

The third benefit of receiving independent annuity advice from an expert in the field is that the expert is most likely going to be able to find better rates than the average consumer. This is almost guaranteed if the consumer is simply going direct and not using the open market option to find the best deals and rates for their annuity purchase. Using the independent annuity advice of an expert can help the consumer to find the best rates and deals available in the current market.

Lastly, and most importantly and simply, by seeking out an independent financial adviser, the consumer can rest assured that the independent annuity advice they are receiving is worthwhile. They can be more secure and stable in their decision making and can be comfortable knowing that they received the best advice they could in order to make their decision. Receiving independent annuity advice can make a consumer far more comfortable determining what annuity they will purchase, if any.

Secure Your Family’s Future with a Guaranteed Annuity

Consumers can be faced with several difficult and challenging decisions as they approach their retirement years. For some of these consumers, the decisions to be made do not only affect them individually but also have an impact on their family, or beneficiaries. For some, investing in a guaranteed income can be the best choice to ensure that once they have passed away, their loved ones will still be able to maintain their lifestyle.

A guaranteed annuity operates in much the same way as a regular conventional annuity. That is to say, with a guaranteed annuity, an insurer agrees to pay out a guaranteed income to the consumer for a predetermined period of time, usually for the remainder of the consumer’s life. With a guaranteed annuity, the income is paid out for the entirety of the consumer’s life, but if the consumer dies and early death within the designated guaranteed period, the income is then paid out for the remaining balance of that guaranteed period, to the consumer’s beneficiaries.

The guaranteed annuity can work for nearly every consumer but is best matched with those consumers who are concerned with taking care of their loved ones, even after they have passed away. For this specific consumer, the guaranteed annuity can be the best choice. It also works best for those consumers who have been the breadwinners, or those who brought in the most income, for their families. For this specific group of consumers, their income has been depended upon and therefore, investing in a guaranteed annuity can ensure that income is still guaranteed.

This specific kind of retirement annuity, the guaranteed annuity, provides this extra and unique benefit to consumers. For those who are looking to take care of their loved ones, even after their death, a guaranteed annuity can provide the necessary safeguard for families. Because each consumer has different needs, it is important to get independent financial advice on which annuity is the best option and which annuity will provide the necessary coverage. However, for those who are looking to protect their loved ones, the guaranteed annuity is most often the best option. There is some kind of serenity and comfort associated with investing in the guaranteed annuity as the consumer is able to rest assured that their family members and beneficiaries will be taken care of, even after they have passed away.