Why buy an annuity?
When it comes to considering your retirement there are a number of different options that are made available to you. With the increasing number of investment firms, traditional pensions are quickly becoming a thing of a past as people are constantly searching for new and innovative ways to invest their money and get a greater return than just their traditional retirement incomes.
Annuities are essentially a lump sum investment that guarantees to pay you an income for the rest of your life, regardless of how long you live. This guarantee works as an investment of your lump sum and ensures that you will always have access to some form of regular income. In general annuities are popular as they are one of the only plans available on the market which provide you an income for the rest of your life and aren’t based on what age you live until.
When and how can I purchase an annuity?
In general annuities can be purchased at any time after the age of 55 – there is no maximum age limit. They are usually purchased by people when they hit retirement age in exchange for the pension fund they have saved over their working lives. The earlier that an annuity is purchased the lower the income amount will be as it will be paid over a longer period of time. Someone who takes out an annuity at the age of 65 will receive more income than those who take one out at age 55.
Annuities can be purchased through a wide range of companies and the Open Market Option allows purchasers to choose between a wide range of different options in order to get the best value for their package. Annuity purchasers no longer have to stay with their original pension provider – they are free to choose between a wide range of options.
What are some potential benefits?
There are a range of benefits that annuities can bring to the purchaser, but the most common is a guaranteed income for the rest of their lives. Once invested, an annuity can provide the investor with a guaranteed income amount per year for the rest of their life. Annuities may also provide a guaranteed investment return and in many cases can protect the purchasers from any problems with the market – which are particularly prevalent in common society.