What is annuity
Today, I want to talk about the annuity. Do you know what annuity is and what it is about, etc.
It just so happens that most people don’t know what it’s because they haven’t had to know it yet . But it’s better to know some specific financial products in advance.
What is annuity?
Annuity is an insurance product that turns your retirement savings into guaranteed regular income, which will be paid to you for the rest of your life (unless there’s something different in the contract).
Of course, the value of guaranteed income depends on the savings you have accumulated during your life.
Most often, an insurance company agent offers an adequate solution to your situation. It’s known that not everyone will live in retirement 10, 20, 30 years. It all depends on your health. Perhaps you already have something diagnosed and doctors can suggest that time is short.
What types of annuities are available
You decide the choice of annuity and it is worth making the right decision, because the wrong choice can cost you a lot.
In April 2015, the rules changed and from the age of 55 you can choose as much money as you like. Of course, only 25% are exempt from tax. But I have already written about it in previous entries related to the pension in the UK.
Therefore, it is suggested to consult a good financial advisor.
There are various methods for securing a pension in the UK.
It all depends on how much money you want to collect and for how long or whether you are willing to risk or not. You can also choose products that protect against inflation as well as those that don’t have security.
Of course, there are many more questions as soon as the time comes to buy an annuity.
What are the types of annuity
Currently, there is a lot of choice on the market and you have to devote a lot of time to choose the best one.
- Level annuities
- Escalating annuities
- Single life annuities
- Join life annuities
- Guaranteed annuities
- Value-protected annuities
- Fix-term annuities
- Enhanced annuities
So at the beginning you have quite a big choice and each policy has its advantages and disadvantages.
You have to be awared that the decision won’t be easy. Everything will depend on your life situation. And that it’s very difficult to determine how it will be in the next five or ten years.
I recommend you see the video: Understanding and comparing annuities – The Money Advice Service
Of course, there’s a lot of information on the Internet and if you still don’t know what an annuity is, then use Goggle.
However, the truth is that you have to start saving for retirement much earlier. And if you have considerable resources then you can easily worry about what to do with the money. The problem will start then, as it turns out that there isn’t enough money to buy an annuity.
I hope you already know what annuity is.
NOTE: I present private opinions and I am not responsible for the readers' decisions. I always try to present current information but may no longer be up to date. Therefore, before making a decision, please verify them and consult a licensed financial adviser. Please refer to the page:disclaimer of responsibility, to make you aware of the importance of the information provided.