How to buy an annuity
There are a number of different options that come to the table when you are dealing with annuities, so it’s well worth considering your options. Working out what type of annuity you want to buy is 90% of the challenge, and once you have made this decision the rest is relatively easy, but this initial decision can make a real impact on your final annuity income, so it’s well worth putting some thought into what you are looking for.
When should I buy an annuity?
One question that many people ask is “When is the best time to buy an annuity?” and the truth is there is no straightforward answer to this question as in general annuities are very market dependant and as a result they are relatively unpredictable. Many people choose to take out an annuity early if the rates are good, on the other hand some people choose to wait until later in life to see if they improve.
What do I need to consider?
When it comes to purchasing an annuity there are many options that you need to take into consideration:
- Do you need any extras such as inflation protection or a built-in death benefit?
- Do you need a joint or single annuity?
- What effect do your current circumstances have on your annuity?
- Could I apply for an enhanced annuity?
- Is my annuity income likely to change in the near future?
Does this decision involve my partner?
In many situations when it comes to purchasing an annuity, if you currently have a partner then it can be a joint decision. If you are concerned for your partner’s well-being in the event of an unexpected death then you may choose to take out a joint annuity which entitles them to continue receiving the annuity even if you were to die unexpectedly. This is a popular option that many couples choose to ensure peace of mind throughout their retirement.