Tag Archives: Annuity Rates

Annuity Comparison: How to Find the Best Deal

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For some people annuity seems like a dirty word, but really it can be a very useful way of managing your money and getting you through your retirement in a way that keeps you pretty financially stable. In the current economic climate, the thought of financial security or of having a regular income every month is a huge relief, and an annuity can really make that happen; but in order for that to happen you have to find the best annuity deal possible, and at the beginning of your search an annuity calculator can be useful.

Annuities are an investment, but a low-risk investment and in order to calculate what your returns might be it is a good idea to use an annuity comparison table. With an annuity calculator you input your age, gender, post code and any medical information that is asked for and the annuity calculator will give you an idea of the income you might expect to receive and the annuity rate that you will get. And with annuities, the rates that you get are crucial. When you buy an annuity, the annuity provider will use the money they give them to buy government bonds and gilts and the income that you will receive will in fact be the returns from that very investment.

While investments fluctuate at the best of times, an annuity is quite low risk, but it is all about the rate that you get, or put another way, the rate of return that you get. So how then do you find the best deal? It is quite simple. The best and only way to find the best deal is to shop around, most annuity providers have annuity calculators on their websites, and if they don’t have an annuity calculator then you can always phone for a quote. In this way you can get an idea of what you can expect from each annuity provider.

An annuity calculator will give you an idea of what annuity rates you can expect, but the rate is not a guarantee and in order to get a serious quote you will need to move from the annuity calculator to the phone or to a financial advisor. It is up to you to get the best deal for yourself but there are people around whose job it is to help you. So make use not only of the annuity calculator but also of the resources of financial knowledge that you have access to, and if you don’t have one, find one.

Uses of an Annuities Calculator

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Just like pension, an annuity is a distribution of lifetime savings that are earned within a specified period or even paid at one go.  This is later distributed or paid to the annuitant after he or she attains an age of 62 years. Unlike a pension where one is paid the whole lump sum of money, an annuity is distributed as an annual income once one retires, and is determined by the amount of money the annuitant has accumulated or agreed to pay as annuity.

An annuities calculator on the other hand is a spreadsheet that helps one determine the amount of money to pay as annuity. This calculator calculates the amounts depending with the market conditions and economy, and gives an exact amount of money that one is required or willing to pay as per his or her preferences. This calculator gives you an exact amount of what you need to pay per month, or yearly as per your specifications, and is a key tool used by insurance brokers to calculate insurance rates for people.

The other use of this calculator is to help predict life expectancy rates in relation to the current rates, which is also determined by the company offering the same. However, if you are looking for an annuity service provider to use, you will need to make sure shop around for similar companies, and then select a company with cheaper rates to use.

Nonetheless, you also need to be aware of the annuity rates before you can set a fixed amount of money to pay as annuity. An annuity calculator on the other hand acts as a guiding tool that has helped many novices understand what and how much it will take them to secure a better future.

One thing you need to know for sure is that, the less the amount of money you pay for annuities, the less the amount you will receive during your old age. The calculator can help you make a distinctive budget on the amount of money you want to be receiving per month, which means you will be able to set yourself for that, or even change your lifestyle.

Use your Pension Fund to purchase a Lifetime Annuity

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A Lifetime Annuity is a way to turn your pension savings into an income during retirement. While some annuities last for a fixed period of time such as five or ten years, a lifetime annuity can go on until the day you die. Lifetime annuities can therefore be a way to ensure that your savings provide a guaranteed income for the rest of your life.

There are different ways in which a pension fund can be used for financial security during retirement and annuities are one of them. You can purchase an annuity with a lump sum – which can either be all or part of your pension savings. How much income you could generate depends on the size of your pension pot and how much of it you wish to invest in an annuity. Up to 25% of your pension fund can be released as a tax free lump sum and a large proportion of people use this to invest in an annuity.

How much income you can generate also depends on other factors such as annuity rates, your lifestyle and health criteria etc. Just like enhanced mortgages – there are enhanced or impaired lifetime annuities for people with certain health and lifestyle indicators. A shorter than average life span allows annuity providers to pay out more than they would normally as the expected term of the annuity is shorter than average.

As mentioned earlier, a lifetime annuity is guaranteed to continue generating an income until the end of your life, and as such, can never be completely used up. It guarantees an income for as long as you live – which can be a significant factor at a time when people are living for longer than ever before. There are different types of lifetime annuities – such as level annuities and investment linked annuities.

You can also add additional features to annuities such as protection from inflation, joint annuities for a partner to continue receiving income after you are gone etc. Adding these bells and whistles to a lifetime annuity will affect the income you receive. For instance, inflation linked annuities increase over time – so the income received initially is normally much lower than you would on a level annuity.

Investing in a lifetime annuity is one of the most popular ways to provide financial security during old age. There are many different types of annuities and several annuity providers on the open market – the best way to find an annuity that will suit your individual circumstances is to shop around.