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 the definition of procurement? To procure something is to plan and research its purchase, examine the product in all its aspects and to find the appropriate product that meets all the demands and needs of the buyer. As such, to procure can simply mean to buy, but with a far more analytical approach. When you buy an annuity, you are making an important decision that will affect your income during the rest of your life. An annuity once purchased cannot be reversed, and so buying an annuity is a decision that should be treated with some seriousness.
We may not realise it, but whenever we do buy something we are, in fact, procuring it. First of all we analyse our requirements, we try to understand what we need and why, next we determine a budget, consider different options, think about long term prospects and lasting power of the different options and then finally, make the purchase.
Therefore, don’t simply buy an Annuity; rather, look at it as procurement. After all, an annuity is not like purchasing an electric kettle or a pair of pillow covers. It is something that plays a significant role in retirement income; will have a huge impact on your financial security during retirement; and therefore has implications for the quality of the rest of your life.
When it is time to buy an annuity, pensioners have the right to explore the open market and shop around for the best annuity. This is known as the open market option. Despite this, a large proportion of people do not exercise this right and simply commit to the first annuity deal that is offered to them by their pension provider. Many people do not offer the same time and effort when they buy an annuity that they would to buying something far more insignificant!
Research has shown that shopping around for the best annuity is one of the most important steps in ensuring that you maximise your pension savings during retirement. Indeed, recent figures show that using the open market option to look for the best annuity deal could mean getting up to 46% more income during retirement. Not only that – shopping around also makes you aware of the different types of annuities available on the market so that you can choose one that truly suits your individual needs. Procurement involves reading reviews, understanding different options, shopping around, negotiating with sellers and finally, making a commitment to buy the product that best suits your requirements. These very same principles must be applied when you buy an annuity.