While choosing the best annuity can be an important decision, it is at least as equally important to choose to invest with the right provider. There are a number of different investment and annuity products available from nearly every provider but they are not a one size fits all. Rather, it is important that investors ensure that they are investing their money in both the right product as well as with the right provider.
To begin, it is crucial for investors to make sure that they buy annuities with FSA authorized and regulated annuity providers. The Financial Services Authority serves as a watchdog to ensure that investors are shopping around for the best annuities. In recent years, the FSA has determined that many investors are not using the open market to buy the right annuities. In fact, six out of every ten annuity investors are simply choosing the option offered by their pension provider, instead of shopping around and potentially finding a better fit for their financial needs.
Not only have some investors been failing to use the market as a means to ensure that they are buying the right annuities, some consumers are even falling victim to scams that are putting them in negative equity situations, forcing their spouse to end up actually paying off debts after death of the investor.
While choosing the best annuity can be a time consuming task, it can also be a worthwhile investment of both time and money. However, choosing to buy the best annuity is only part of the research and work associated with investing. Buying annuities also involves picking the perfect provider, one that is both FSA authorized as well as one that provides the best annuity for purchase. This means finding an annuity and provider that will cater to the individual and unique needs of the consumer. Not all annuities will work for every investor and not every provider will offer the best annuities for purchase for each consumer.
Annuities have quickly taken over the retirement market and offer a solid and reputable way to ensure financial stability during the retirement needs. However, they can only do so if the right annuity and provider are chosen. Buying annuities can take a great deal of time and research but it is worth it for the investment that can potentially be paid out to the consumer.
Coming up to the age of retirement is never an easy thing, your life is about to change in a dramatic way, but in addition to that you have to start thinking about how to get yourself from one side of retirement to the other with a minimum of financial stress and hassle. Once you begin looking into the various choices that are available to you after retirement you will come across annuities, again and again. An annuity, even the best annuity, will work in a basic way as an exchange. In exchange for your pension you will receive a regular income for the rest of your life.
There are many options that you can choose from, but an annuity will certainly be one of them, and with the wealth of annuity providers out there, the key is to find the best annuity and the best annuity provider that you can. But the question then becomes what is the best annuity, and the answer is quite simple. The best annuity is the one that will make sure that you are financially stable and looked after, from the moment you retire until you die.
This might seem like a big thing to ask an annuity provider, but really this is what they are offering, and what the best annuity should always provide. Unfortunately, there is no singular answer to what the best annuity will be. It will depend on the pension and savings that you have managed to put together. It will depend on whether you want the best annuity as a single person or as a couple. It will also depend on your current health and if you are taking any medication.
There are so many variables even before you begin to think about the annuity providers, that actually the only way to find the best annuity is to find the best one for you. Luckily this is not too difficult to find out about. There are many websites dedicated to educating you about annuities and what your options are, but it is your insurance company’s responsibility to inform you about what your options are. So to find the best annuity, this is a good place to start. However, as in all shopping, it is best to shop around before making a firm decision, especially since you cannot get your money back once you have bought an 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.