The Open Market Option And Annuities
The financial markets seem more like a house of cards and retirement ages keep rising. It's little wonder so many are worried about tomorrow. The popular, and once compulsory, pension plan has long been annuities. But as they decide your annual income for the rest of your life, it's wise to shop around.
Annuities take around 75% of a pension pot and pay it to the 'annuitant' as annual income; guaranteed until you die. The rate at which it is paid is based on age, gender, location and lifestyle choices. For example, a smoker will receive a higher rate, presumably over a shorter period, while healthier annuitants receive less for longer.
Yet the market can be a minefield and experts say the annuities offered by different providers vary by up to 20%. If that wasn't reason enough to shop around, there are at least another five factors that can impact on the amount you receive: the size of your pension fund; market conditions; your age, gender and lifestyle choices and how you want the money paid.
When shopping around, there are a number of key decisions to be made: do you want your partner, family or estate to receive the remaining annuity when you die? How often will you receive payments? Do you want your income fixed or linked to inflation and will you be sharing the annuity with a partner?
Your own health, and that of the markets when you apply both affect payments, as does inflation, which can see some arrangements worth less as time goes on. The importance of shopping around is also compounded by this being a once and for all decision. Price comparison sites, impartial citizen advice and sites like these are all there to help and ensure that however you finance them, your golden years actually contain an element of the precious and golden.
Article Source: FxTradingStock.com
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Find out more about comparing annuities
by: Annie Newton
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Word Count: 316
Date: Sun, 30 May 2010
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