With annuity rates being depressingly low, those on the verge of investing in an annuity are facing a dilemma – wait for the rates to improve, or choose from one of the annuity deals available now and make the best of it. Keep waiting and hope that you get a better deal, or shake the hand of the annuity provider offering the best deal right now?
Annuity rates depend on a number of complex factors, and according to financial experts, the rates are not set to improve significantly, at least in the short term. However, there could be tiny fluctuations in the rates from time to time. But delaying investing in an annuity may mean that the lost income due to the delay may be far bigger than any gains from small fluctuations in rates.
Even though rates may be low at the moment, there are various types of annuities available on the market, and you can find a product that best suits your needs and offers an income that you are comfortable with. A financial advisor can guide you through all the types of annuities, as well as your own needs and make an informed choice.
Waiting for better annuity deals may prove to be a bad idea on three levels. One – it may mean that you lose out on regular income due to the delay, two – while you are waiting for annuity rates to improve, rates may go even lower, and three – any attractive deals and offers currently available could be withdrawn without any notice. Unnecessarily delaying investing in an annuity in the hopes of better annuity deals may therefore mean that you not only find a better deal but also make a loss in the process.
Popular financial products being withdrawn is not without precedence. The Halifax Retirement Home Plan is a good example of this. The Halifax Retirement Home Plan was a highly popular mortgage that was withdrawn without any notice in August 2011. This was the only flexible interest only equity release plan of its kind at the time and left a lot of people who were interested in it without any other option.
In fact, annuity rates, annuity deals and indeed annuity products can be withdrawn, updated or changed on a day to day basis. Waiting for rates to improve may mean that you not only have to commit at a lower rate in the future, but could also mean that you do not get the specific type of annuity that you wanted in the first place.