What is an Annuity
An Annuity is a simple retirement payment option that guarantees to pay you a particular amount every month throughout your life in retirement.
After you have taken your retirement tax free lump sum you may be able to choose between an Annuity and/or an Approved Retirement Fund. An annuity is designed to provide you with a regular and guaranteed income for the rest of your life. It is important to choose an annuity that reflects your needs and those of your spouse in retirement, so seeking financial advice before you make a decision is important.
Why choose an Annuity?
Annuities may be more suited to people who wish to avoid potential risks, and would prefer a guaranteed income for their retirement. There are different advantages to taking out an Annuity and/or an ARF.
Types of Annuity
There are a number of choices you need to make when purchasing an annuity: A Single Life Annuity is payable for the rest of your life only. With a Joint Life Annuity, a percentage of your pension is payable to your spouse after you die. If you choose to include a Guaranteed Period, your pension will be payable for a minimum of the guaranteed period, even if you die during that time. A Level Annuity means payment of the Annuity remains the same throughout your life and an Escalating Annuity means payment of the Annuity increases at a fixed rate each year.
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