Millions of people that approach retirement find themselves looking for a secure income that will help them to live happily for the remainder of their days after work. These individuals often shun pension freedoms and switch to a traditional annuity. While the people who take their entire pension pot as cash often risk running out of money in old age, pensioners with annuities know that they have some kind of secure income that is unlikely to run dry.
Unfortunately, failing to shop around and ensure you're getting the best value for an annuity could mean that your retirement income is reduced by literally thousands of dollars each year. There are huge percentage gaps between the worst and best rates available. So how can you get top rated annuities?
Step 1: Look at Your Pension Money
A few months before you are set to retire, your pension firm is likely to supply you with a package of information that includes data on how much you're going to get and the different annuity rates that might be available to you. Research shows that a great number of people will benefit from switching providers at this time, but there are exceptions to this rule. For instance, if your current provider offers a fixed annuity rate, which is set from the time that you began your pension, you might find that you receive higher amounts than you could get from any other offer on the market.
Step 2: Consider Your Priorities
The best way to get top rated annuities for your particular situation is to decide what matters most to you. For example, you need to know whether you want your partner or spouse to inherit your income after you've gone, and whether you're happy to spend your complete pot, or whether you will need to keep investing. Some people will even need to think about whether they want their income to rise the older they get.
In most cases, the highest rates are often paid on annuities wherein your pension ends when you pass away. However, it is possible to choose special to rated annuities that can be passed onto your partner in spouse. In return for lower initial incomes, your joint life annuity will be paid to the person you choose when you pass away.
Step 3: Get Plenty of Advice and Compare Rates
Remember, you're not expected to know everything there is to know about annuities when you're preparing for your future. There's nothing wrong with asking for a little advice. In some cases, you can choose to get advice from a professional for a fee, or you might choose to use free resources online to supplement your existing knowledge. In most circumstances, you will find that you are eligible to bigger payouts for certain reasons, to find out as much as you can to improve on the amount of money you have access to.
Once you have considered the annuity type that is best for your needs and gotten plenty of advice from professionals, it's crucial to shop around. You can use online comparison tools to do this in the same way that you might for loans and other financial options, but remember that these don't always show every provider.