Tag Archives: Annuities

Some Helpful Advice on Annuities

When you retire, or just before, you will be looking into ways to make your savings and your pension last for as long as possible. There are a number of investment options that you can make, and there are various ways to make your money last: one of these is an annuity. Annuities can seem complicated because there is so much information available and it can be difficult to sift through all of that to the details that you really need to know. So here is the information on annuities that you really need to know.

An annuity is a financial product that you can purchase when you retire. You have the option to take all of the money that you have saved in your pension and use it to buy an annuity. That annuity will then guarantee you a regular income for the rest of your life. You should not take the first annuities deal that you come across, even if it is offered by your current insurer. You absolutely must look around for the best possible annuities rate and the best deal. When you purchase annuities, the insurance company will use that money to buy gilts, the return from this investment is what makes up your regular income.

This is why it is so important to get the best annuity rate of return that you can; in addition you cannot get the money back once you have bought an annuity. There are a number of different kinds of annuities which you can choose from but it is in your best interest to look into an enhanced or impaired annuity. With annuities of this kind, you will receive a better annuity rate because your life expectancy will be less. People who are smokers, who are overweight, suffering from certain medical conditions or who are on prescription medication should apply for this type of annuity. This goes too for people who have been in hospital recently or who have a history of heart disease or cancer.

There are other kinds of annuities that you will have to look into, you can choose between a fixed annuity where you get a fixed amount every month that does not change and an index linked annuity which changes with the stock market. You can also get an annuity that increases with inflation. There are many options but the key thing to remember is to do your homework about annuities and shop around for the very best deal.

Knowledge is Power When Buying an Annuity

Annuities are one of the most popular ways for people to turn their life savings into a regular income during retirement. In fact, the annuities market in the UK is the largest across the globe. There are different types of annuities, but on the whole an annuity works like this: the annuity provider, which is essentially an insurance company, agrees to pay you a regular income, either fixed or variable, for a fixed term, or for as long as you live. As an annuity once purchased cannot be cancelled or returned, buying an annuity is a decision that warrants extremely careful consideration.

The first step in making a correct choice when buying an Annuity is understanding your own needs and priorities. Knowing exactly what you need will help you make the right choice. For instance, is having a fixed, steady source of income throughout your life more important to you than risking a higher income with an investment annuity? If so, a conventional annuity may be more suitable for you. Or, would you prefer to have an annuity that grows with time, at the risk of settling for a smaller pay-out in the initial stages than a fixed life annuity? If so, an escalating annuity might be more suitable for you.

Buying an annuity correctly requires an understanding of the annuity market and how different annuity products work. You can find lots of information about annuities online through advisory websites, or even through different annuity providers. This includes finding out about different bells and whistles that may make an annuity work better for you. Buying an annuity that works best for you is all about looking in the right places, exploring the right resources and using the tools that are readily available to you.

For instance, an annuity calculator can help you determine the maximum income that you could generate through an annuity. Online annuity calculators are now widely available, and are easy to use, quick and convenient. Most calculators require basic information about your age, gender, location, and health and lifestyle habits to work out an accurate quote.

When buying an annuity, knowledge of all the aspects of the process is akin to power. The more you know, and the more knowledgeable you are, the more likely you are to find the right annuity.

How Best to Compare Annuity Rates?

Once you reach the age of 55 you will begin to think about how best to make your retirement savings last for as long as you will need them. This is a difficult proposition, and there are many options that are available to you. About six months before you retire you will be sent an information package by your current insurance company. In this package will be information about the annuities that they have to offer. However, it is in your best interests to compare annuity rates.

If you are even considering taking out an annuity then the worst thing you can do is take the first annuity offer that you get; you absolutely have to compare annuity rates. The first reason is that once you have bought an annuity you cannot get your money back, and the second reason is that if you are going to try to take care of yourself financially for as long as possible you will have to find the best annuity rate to get you through the rest of your life. This is why you have to compare annuity rates.

But what is the best way to compare annuity rates? A good place to start is with annuity calculators. Most annuity providers have these on their websites and with a bit of personal information they can give you an idea of the kind of annuity rate that you can expect from them. These quotes are not guarantees, only a guide. So the next step to compare the best annuity rates is to get an actual quote from the annuity provider. There is also another way to compare annuity rates and that is to go to independent annuity observers like the FSA and have a look at their rates.

By deciding to compare annuity rates in this way you will have an idea of all the annuity rates that are available and what the various annuity providers have on offer. Each annuity provider will have something slightly different to offer and slightly different annuity rates and of course you will want and need the best annuity rate, and annuity package that you can find. Shopping around and making the effort to compare annuity rates is not a waste of time, it is preparing for your future. So take the time and go through the various steps until you find an annuity rate that works best for you.

Are you a Baby Boomer looking for Annuity Solutions?

For baby boomers, retirement is quickly approaching. With retirement, come several questions as to how retirement can be funded, how the lifestyle to which consumers have grown accustomed can be maintained even after the working years have ended. However, there are options available to consumers, including baby boomers that are looking for ways to retire comfortably and quickly. Two of the most prevalently used options available to baby boomers are annuities and equity release schemes, both of which could potentially help consumers retire comfortably and on their terms. Between both of these retirement options, each consumer should be able to find a way to retire that fits their individual and unique needs.

Annuities

There are several different types of annuities available to consumers, each with their own set of advantages and disadvantages.  However, most of them operate similarly in that the consumer trades in their pension savings in return for income that is guaranteed for the rest of their life.  The income is guaranteed and relies most substantially on the pension savings that has been accrued by the consumer. Once the consumer has chosen their annuity, no alterations may be made. That is to say that the consumer needs to ensure that they are making the right decision when they choose their annuity. With so many options available, the choice can be challenging but it can also be worthwhile in that it guarantees a certain level of income for a predetermined period of time, most often the lifetime of the insured.

Equity release

Equity release schemes are another options available to baby boomers, and any other consumers who are nearing their retirement years. Equity release schemes are available to those UK homeowners who are aged 55 or older. The purpose of the scheme is to allow the consumer to receive tax-free cash from the value of their home. This cash can be spent however the consumer sees fit. It works best for those consumers or baby boomers who are looking for a tax-free lump sum to help fund retirement, the ability to release cash whenever most needed, or the freedom to spend cash independently.

Regardless of how baby boomers choose to fund their retirement, whether it be through equity release mortgages, annuities, or other investment strategies, they should always consult with a financial adviser before investing in any particular strategy in order to ensure that the decision is the best one possible for each baby boomer’s individual and unique retirement needs.

What is an Annuity Calculator?

For those consumers who plan on purchasing an annuity with their pension savings, an annuity calculator can be a very beneficial and useful tool. An annuity calculator is a guide used by consumers to help gauge exactly what type of income they can expect to be paid to them once they have retired. There are several factors used to determine income amount and the annuity calculator takes these factors and computes a reasonable estimate of income. While the number is truly just an estimate, it can be used by the consumer to better plan for the future. This means more accurate budgeting and planning for after the working years.

Consumers should always consult with an annuity calculator, most of which are free and easily accessible on the internet, before making any kind of retirement or investment decisions. This is because the annuity calculator can help the consumer to better understand what they can expect from their retirement. This proves incredibly beneficial to the consumer, especially the consumer who does not truly understand how their annuity works or what amount of income they should expect from their built-up pension savings.

Most annuity calculators ask for the same information in order to compute income amount. Fields include such factors as age, health status, and estimated current pension value. Having an annuity calculator determine estimated income amount is crucial for any consumer who is looking to use their pension savings to fund an annuity. Most consumers need to at least have some kind of understanding of what their income will be once they have ceased working. This allows for more sensible planning and investing. For those consumers who are diligent in their planning, consulting with more than one annuity calculator can help to better estimate retirement living. It can determine the accuracy of the estimate and allow consumers to rest assured that they have a grasp of what their financial future may be once they have retired.

For consumers who use an annuity calculator to help estimate their income after retirement, they must keep one crucial fact in mind. Annuity calculators should truly only be used as a guidance tool. They are not perfect and they do not always compute the exact income amount that can be expected, especially given that there are so many different annuities, all of which have different advantages and disadvantages and some that will even pay out more over an expected shorter period of time, such as an enhanced annuity. Despite the idea that annuity calculators can only give income estimates, they are truly worthwhile and beneficial for those consumers looking to better manage their retirement years.