Tag Archives: Annuities

Guaranteed Annuities can secure your retirement future

Annuities are one of the most common and popular ways to turn pension savings into a regular income during retirement. There are many different types of annuities – and fixed guaranteed annuities and variable annuities are the two main types. Guaranteed annuities provide a guaranteed income during old age, either until you die or for a fixed, predetermined period of time.

As opposed to variable annuities, guaranteed Annuities or level annuities offer a guaranteed income to be paid for a fixed period of time. This can be for a fixed period such as five or ten years, or in case of lifetime fixed annuities, until the end of life. Guaranteed annuities offer the peace of mind and security of knowing exactly how much you will receive and for exactly how long.

Having the security of knowing that you have a fixed, regular income no matter what can not only offer peace of mind but can also be very useful when planning your budget in the short term, as well as the long term. Knowing exactly how much your income is going to be can help you plan your finances and adjust your lifestyle to suit your income. You can also plan ahead for any additional expenses and make sure that you have enough money when you need it.

With rising costs of living, rising inflation and people living for longer than ever before, financial planning during retirement has become extremely important. A proper budget is one of the most important tools for financial planning when you have a limited income – and this is especially relevant during retirement, as retirement is the time when most people need to optimise their life savings in order to make the most of them. A retirement income is meant to support your day to day expenses, as well as any other expenses you may have from time to time, and guaranteed annuities can help you plan these expenses properly.

For instance, if you need to plan a big one off expense such as a holiday, a gift to your children, or home improvement works, you can plan it ahead so that you have enough money to meet your monthly expenses and enough saved up for the one off expenditure.

A fixed guaranteed annuity offers a steady and stable source of income for a fixed period of time, or until the end of life, depending on the terms of the annuity purchased. Since you know exactly how much money you will receive, at what intervals, and until when – you have the freedom to plan your expenses in a manner most suitable and comfortable to you. For those who rely solely on their annuity for income during retirement, guaranteed annuities can offer the most reliable and stable form of financial security.

Annuity Rules Are The Biggest Misconception

An annuity is an important tool in the retirement sector, which allows you to draw your pension fund as regular income during retirement. Investing your hard earned life savings into an annuity is a very important decision indeed, and it is vital to shop around not only for the most suitable annuity type, but also for the most suitable annuity provider for you.

The biggest misconception when it comes to annuities is that one is required to set up an annuity with their pension provider. The truth is that thanks to the open market option, there is absolutely no need to be limited to your pension provider for an annuity. In fact, the Government is trying to encourage people to use the open market option and shop around for the best annuity deal before investing.

Annuity rates can vary very widely between providers. Also, the variety of annuity products available means that different annuities will have different rates even from a single provider. So a company that offers the best rates with one type of annuity may not necessarily do so with a different type of annuity.

The first step towards finding the right annuity, therefore, is to understand your own needs and find out what type of annuity works best for you. For instance, would you need a single life annuity, or a joint annuity? Would you rather have a guaranteed income for life, or invest in a higher risk investment linked annuity? Would you need a fixed annuity with fixed payments for life, or an escalating annuity? These are some of the questions that need to be answered before you can shop around for the best annuity quote.

Your pension provider is bound to offer a quote, and there is no reason why you should not consider this quote, as there is every possibility that it will not only be competitive but may even be better than the open market options. The point is not to limit your options, but to shop around and make an informed choice about this important step in life.

The Financial Services Authority has worked hard to ensure that pensioners have the right to exercise an open market option and shop around for annuity quotes. The FSA continues to encourage people to use this option and has also made it mandatory for your pension provider to remind you of this option while offering a quote. That you must purchase an annuity from your pension provider is a myth, but thankfully, one that is continuing to diminish rapidly.

Instant Annuity Quotes Available Online

Annuities have become incredibly popular in the world of investments and retirement planning. For many, annuities serve to promote a retirement life that is worry-free, establishing a guaranteed income in some amount and allowing the consumer to budget for the years following their employment. For many, this investment strategy is priceless. There are several benefits to investing in an annuity. Most consumers take a portion of their pension to fund their annuity, allowing themselves to budget for a predetermined monthly income over the course of their retirement.  Using this strategy often leaves consumers questioning the amount they can anticipate once they retire. If consumers do want to invest in an annuity, they need to know what they can expect for guaranteed income. For most, they can simply input data online and find exactly what they need.

As technology has evolved to help make tasks easier, simpler, and friendlier for the user, financial services have become far more manageable for the average consumer and investor. This is especially true for those looking to invest in annuities. Annuity Quotes are available right online for most consumers and can be determined far easier than they ever could in the past. In fact, what used to take a visit to a financial adviser can now be determined right online by the consumer themselves.

Consumers can find their annuity quotes online fairly easily. The data entered is simple and can be filled in independently by the investor. Examples of information needed include age and the age of spouse if applicable and estimated pension value.  Consumers can even search for the best quote simply by creating criteria by which to search. They can search using health rates, smoker rates, guarantee period, purchase price, and escalation rates. Several websites even offer the consumer tips on how to use an annuity calculator to give them the most reliable rate or quote. These tips include applicable information on when to buy an annuity, age, state of health, the pension of a spouse, and gender.

Research is a crucial part of any investment strategy. This is especially true of annuity investments given that the income they produce most often sustains lifestyle during retirement. There can never be too much research done on the appropriate path to take when investing in an annuity. Annuity quotes are part of this research and because of technological advancements, most consumers can find annuity quotes online very easily. This can help them budget and plan for the future.

Which UK Companies offer an Enhanced Annuity?

Many, if not most, consumers look to annuities to help them offset their living costs as they phase out of their working years and enter in to retirement. However, there are many options available to consumers that they often neglect to look in to each annuity that is available to them. For many consumers, this means missing out on an enhanced annuity, offered by an enhanced annuity provider.

With an enhanced annuity, a medical or health condition can actually work in the favor of the consumer. It can even boost annuity by as much as 50%. Enhanced annuities, otherwise known as impaired annuities, work on the notion that a consumer who has a medical condition will have a shorter life expectancy than a consumer who is in a better health state. Enhanced annuity providers believe that they will have to pay out an income for a shorter period of time, given the shorter life expectancy, and therefore, they pay out a higher level of income to the consumer. This allows the consumer to have more money each month, based solely on the idea that they have a medical condition that may shorten their life expectancy.

Nearly 20% of all annuities sold by providers are enhanced, or impaired, annuities. However, several of those consumers who would qualify for an enhanced annuity with an enhanced annuity provider, simply do not apply for the benefit. There are several general conditions that are used as qualification for an enhanced annuity. These include, but are not limited to, high blood pressure, cancer, diabetes, kidney failure, smoking, obesity, high cholesterol, and asthma. Consumers can qualify for an enhanced annuity through an application process that focuses on health and lifestyle conditions. There is hardly ever a medical examination required.

Not every standard annuity provider offers an enhanced annuity. In fact, there are very specific enhanced annuity providers currently on the market. The enhanced annuity specialists currently available include Partnership, Just Retirement, and MGM Advantage. Other enhanced annuity providers include Canada Life, Legal & general, Prudential, LV=, Aviva, and Reliance Mutual.

Any consumer that is looking to invest with an enhanced annuity provider, or any annuity provider, should consult with an independent financial adviser. Investing in any retirement plan can often be confusing and challenging but with so many options available to consumers, purchasing the right annuity for retirement can often be a daunting task for many. Using an expert for advice and information can help to ensure the consumer that they are making the best decision for their individual situation.

The Facts about Annuities

The number of consumers looking to finance their retirement years with the help of an annuity continues to grow. Annuities provide a sense of stability and security for consumers as they age out of their working years and allow some sense of financial freedom for those who are looking to enjoy their retirement. However, consumers need to know all of the facts about annuities before they embark on an investment. These facts about annuities can be learned through an independent financial adviser or even through independent research by the consumer. Either way, it is important for consumers to get all the facts about annuities before choosing the right option for them for their retirement, similar to engaging in any other investment strategy.

There are several different types of annuities, all of which have different eligibility factors and qualifying guidelines. The facts about annuities varies between type of annuity which is why it is critical for the consumer to do as much research as possible before making any determination on how they would like to invest their money for the future and for their retirement.

Different Types of Annuities

There are several different types of annuities available for consumers, all of which have different factors and guidelines. There are enhanced annuities available for those consumers who have a documented illness that may shorten their life expectancy. This specific annuity requires documentation of the illness in order to qualify. There are also conventional annuities for those consumers who are mainly focused on having a guaranteed stream of income throughout their retirement. For those who want income for only a short period of time there are fixed term annuities available that will make payments for only a designated period of time. And for those who would like to try their shot at earning money during retirement, there are annuities that can be linked to designated investments in the financial markets. Regardless of the choice, consumers should be educated on the exact facts about annuities, and each type, before investing.

Annuity Rate Factors

Not only do consumers need to know the basic facts about annuities, but they also need to aware of how their annuity rate will be calculated. The amount that consumers can expect to receive from their annuity depends on several factors. The first of these factors is savings. Part of the annuity rate will depend on how much the consumer has managed to save in their pension pot. Secondly, where the consumer lives will impact their annuity rate. Providers can base annuity rates on the mortality rates associated with different parts of the UK. Health of the consumer will also be factored in to their annuity rate. If the consumer is in poor health not only may they qualify for an enhanced annuity but they may also receive a higher rate because the insurer assumes that they will not be making payments for as long as they would if the consumer were healthy. Lastly, the consumer’s annuity rate could be affected by the current rates offered by other annuity providers. This is basic competition in the market. If insurers need to compete for business, they will most likely keep their rates competitive to attract more business.

Consumers should know all of the facts about annuities before they decide to invest. This not only means becoming educated on what is available but also becoming educated on what factors may influence their annuity rate, and therefore, their income stream. Knowing all of the facts about annuities can only serve to help the consumer plan for their future and their plans once they retire.