Are you looking to boost your retirement income?
Well, then, you’ve probably heard about annuity purchasing. But, even if you haven’t, this is something you definitely want to know about.
The tricky thing is that most people don’t know the first thing about retirement finances in general. In this article, we’ll try to set that matter straight.
Keep reading to learn more about annuities and all of their purchasing benefits.
What Is an Annuity?
An annuity is a type of income that you can receive in retirement. But, unlike other forms of income, an annuity is actually something you can purchase.
An annuity is sold by an insurance company. Basically, the way it works is that you buy a policy that will guarantee you a certain income for a certain period.
There are two types of time periods that you can buy:
- A lifetime annuity
- A fixed-term annuity
A lifetime annuity, as the name suggests, will pay you an income for your whole life. It’s also possible for these annuities to pay out to a beneficiary (such as a husband or wife) after the policyholder dies.
On the other hand, a fixed-term annuity is a policy that will pay out for just a particular time period. Some of the most common time periods for these policies are five years or ten years.
Benefits of Annuity Purchasing
The main benefit of annuity purchasing is that you have a guaranteed income. Receiving annuity payments can take a lot of the pressure off financially as you move through your golden years.
Another major benefit of annuity purchasing is that you can get a finance product that suits you personally. When you go to a structured settlement financing provider like Rightway Funding Group, you can choose a number of different annuity options to suit your lifestyle.
Your annuity product is going to differ depending on things like:
- Your age
- Your health needs
- Your projected lifestyle expenses
- The size of your pension fund
- The rates available at the time of purchase
Last, a really strong benefit of annuity purchasing is that you can guard your finances against an economic downturn. If the rates currently on offer are suitable for you, then you can give yourself an income that will weather most economic storms.
Having said that, it’s important you get expert financial advice from someone like a chartered accountant. This will help you work out exactly what the right policy is for you and it will ensure you have peace of mind heading into the future.
Retirement Finances: Act Early!
Now you’ve got a good idea of how annuity purchasing works, but it’s important that you don’t get complacent!
The best time to plan for your retirement period is right now when you still have some financial leverage to use. So, gather as much information and advice as possible and then give yourself some economic security.
If you’ve found this information useful, why not check out some of our other great articles on financial topics?