Choosing your retirement annuity – use your open market option
When the time comes to hang up your briefcase for the final time, you will be considering ways to turn your pensions savings into a regular income, that will fund your lifestyle in your years of retirement. The most common way of doing this is to purchase a retirement annuity, or retirement income annuity.
Retirement annuities are purchased with your pension savings, and provide a regular monthly income on which to live. This income is guaranteed to you for the rest of your life.
There are various types of retirement annuity available, to suit the priorities of every retiring pensions saver. It is therefore important to ask your financial adviser for a retirement annuity comparison, to inform you of the advantages of the various retirement annuity types. Many retirees who are smokers or with certain health conditions could secure a higher income by obtaining an enhanced annuity, for example, while those with more serious illnesses may benefit from obtaining an impaired life annuity.
Would you like Principle First to make an independent retirement annuity comparison on your behalf? Contact us for an annuity quote or ring 0800 678 5929 now
The Single Life retirement annuity
The single life retirement annuity pays out only to you, and payments cease when you die.
The disadvantage of the single life retirement annuity is that, if you lived for just a few years after purchasing your retirement annuity, you would have had relatively little, in return for the savings in your pension fund.
It is possible to build minimum guarantees into a single life annuity, so that it pays out for 5 or for 10 years, providing an income to your dependents for that term, even if you die earlier.
The Joint life retirement annuity
The ‘joint life’ retirement annuity gives a retirement income which will provide for your spouse as well, running until you both have died. After you die, the income paid to your spouse can continue at the same rate as you were receiving. Alternatively it can be set to fall to two-thirds or a half of that, in return for a higher income from the retirement annuity now.
The retirement annuity you choose should not be the first one offered to you by your pensions provider. You can use your ‘Open market option’ or OMO to compare annuity rates and seek out the best deal from the many retirement annuities on the market.
An independent financial adviser will make a retirement annuity comparison for you to show the best annuity rates currently available.
Do you need expert retirement annuity advice? Contact us for an annuity quote or ring 0800 678 5929 now
