Retiring can be downright complicated. You think that you’re doing all of the right things and making all of the right moves, but is that really the case? Are you honestly getting closer to your goals of being able to rest after years and years of hard work? If you’ve put your money into the pension scheme and not found many results, it’s time to think about an annuity.
This is a financial product that you get through exchanging a lump sum for an ongoing income. You will exchange your pension scheme for an income that gets paid out for the rest of your life. The rate is set by the insurance company, and it’s based on age as well as the state of your health. These things are calculated by actuaries inside the company, which means that the rates are always subject to change. You should make sure that you compare a lot of different annuity rates before you settle on the “right one” for your needs. It’s going to be completely up to you from start to finish, so why not make sure that you can get the best deal possible?
You see, everyone can benefit from an annuity. It’s all about turning lump sums into real income. Keep in mind that the source of your lump sum matters. You can use funds from a personal pension, as well as any stakeholder pensions and plenty of money-purchase employer schemes. When you use your personal pension, this is called a compulsory purchase annuity, because you must get the annuity in order to actually tap into those funds.
Even with the limits on annuities — such as the fact that you cannot get the money back once they are converted — they are a sharp tool to have when it comes to truly controlling your retirement. You can trust in a good annuity as part of your overall retirement strategy. Will they be the only thing that you need to rely on? Absolutely not. You will still want to make sure that you’re thinking about getting the other parts of your investment program intact. For example, are you saving enough in those ISAs that you can fill in every year, tax-exempt? If not, you might want to make sure that you review that part as well. Normal savings accounts are also important. Some people even trade in the forex market. No matter what paths you take to retirement, do so consciously — it works out better that way!