There is one very inescapable fact of life, and that is that if you’re working someday you’ll retire, and when you do a whole new chapter will open up. Now places you will want to visit and things that you will want to because finally for once in your life you won’t have to show up for work. One option that you have for financing your retirement adventures is a pension annuity.
You see, one lesson that the recent recession and the resulting plummeting of home prices taught a lot of people, is that you can no longer rely on the equity that you may have in your home today to provide you with an income tomorrow. Also if you talk to someone who’s relying on Social Security or any other government benefits they can tell you one thing. That is that while so much of the talk surrounding them today is great food for debate, it’s entirely different story altogether when you’re faced with the reality of depending on them for survival. Doubts that you can dismiss today are far less easy just to dismiss when you’re facing the prospect that they can be eliminated. And anything that the government provides for you can be cut or terminated.
Besides a social security cheque just won’t provide the level of income that you’ll need for a comfortable secure retirement, keeping in mind the higher levels of inflation are predicted for the coming future. What this means is that all the things you’re looking forward to that you envision as being part of your comfortable retirement are going to cost steadily more with the passing years.
In light of the number of annuities that are available, it’s important that you analyze them carefully before you decide on which one suits you best. For example some annuities are reliant on stock market earnings while others have fees that are charged, fees that are deducted periodically.
Also keep in mind though the money out of your pay that you divert to a pension annuity is tax-deferred. That means that you don’t pay any taxes on it. An annuity agent can be a great source of information on the topic, and they can also help you to analyze your personal information as it pertains to the decision making process. Things like your age, your current income level, your retirement goals, etc. and the lifestyle that you want to live after you retire.
In simple terms a pension annuity is a plan in which a certain amount of your income is diverted into an account much like savings, with one notable difference. That is that money that you put in the bank in a normal savings plan is not tax-deferred. Think of it as an investment in your future.
In the end, what it all boils down to is that comfortable fulfilling retirement years don’t just happen, they are made. They are made by the money you are earning now, if you choose to set it aside for them.
On the other hand, making the decision not to start a retirement pension annuity is like literally rolling the dice on your future because you may not be physically able to go back and earn money if you come up short once you retire.
Investment Sense are independent financial advisors operating in the UK, they offer a free Pension Calculator to help you find the best pension annuity deals available.
“FRA Financial Group Founder Joe RoosEvans is an industry veteran who has built one of the nations’ most successful Independent Marketing Organizations – Financial Resources of America and its affiliated companies, including FRA Financial Group.”