Facing your mortality: Annuity
There comes a time in your life when you realise that you are getting old and pretty soon you will be of retirement age. You start to wonder how you will begin organising your finances for such a time and how to best nurture your nest egg. This is the time when you should consider Annuity.
So what exactly is Annuity? Basically, when you transfer your pension fund into an income you will be paid a salary for the rest of your life. Usually, your pension provider will send you specifics about your pension fund as you are approaching retirement and how you can use it to buy an annuity. The Open Market Option allows individuals to shop around and search for the best deal available.
So who can buy annuity? If you have one of the pension types listed on the website annuity quotes where you can buy annuity. If you have a contract out of the additional State Pension, then you must use part of that pension to purchase annuity. The only time your rights to annuity change is if you are married or have a civil partner. Then you must purchase a joint-life annuity that pays 50% of a spouse’s pension.
The decision of when to take annuity depends entirely on the individual’s circumstances. It primarily depends on the person’s financial well-being and how retiring will affect the remainder of their life.
The amount that you are likely to receive depends on a number of factors as listed on the website mentioned above. There are also different types of annuity, the main ones being; single life, joint life, level income, escalating income, guaranteed period and annuity protection lump-sum benefit. Some companies are also kind enough to offer extra funding for those who may suffer from critical illnesses that threaten to reduce your lifespan which is termed Impaired Life Annuity. For those who smoke regularly or who are overweight, some companies also offer Enhanced Annuities.