Annuities for Your Retirement
Annuities have been the poplar, and sometimes compulsory, product to fund the golden years. Mainly sold by insurers they are based on factors like lifestyle age and gender, but like any financial product they require some thorough research and important decisions. Annuities take 75% of you pension pot and pay it back as a guaranteed income over the rest of your life.
Although compulsory purchase of annuities was effectively abolished in 2006, they’re still complicated for those who do choose the fixed-income-for-life option. Annuities take around 75% of a pension pot and pay it to the ‘annuitant’ as annual income. They are sold by insurance firms and pension providers to anybody of pensionable age. This is a great alternative to Penny Stock Investment because they are much more stable in their return.
Experts warn some rates can vary by as much as 20% and with only one chance to make the right choice the pressure can mount. There are a number of key decisions to be made: do you want your partner, family or estate to receive the remaining annuity when you die? How much could you receive and how will it be paid? Do you want your income fixed or linked to the retail price index, ie inflation and will you be sharing the annuity with a partner? These are all important questions you should ask yourself before you invest your hard earned money.
Where you live and lifestyle factors such as smoking can all have an impact on how your specific plan pays. For example, smokers are paid a higher rate because it is assumed they will receive their 75% over a shorter period.
There are huge benefits to shopping around, not least because this is a once in a lifetime decision. Price comparison sites, impartial citizen advice and banking advisers are all there to help and there is no obligation to agree to a plan that isn’t right for you. After all, you can’t blame people for wanting their golden years to have some element of actual gold. It is important to remember that while this type of investment is generally more stable than Penny Stock Investment it does not give as high returns or yields. It is good to keep your portfolio balanced. Sometimes a mix of Annuities and Penny Stock Investment can be the best option for diversifying your portfolio.
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