Increasing your pension income

Shopping for the right annuity can help you increase your pension income.

10:16 07 December 2013

Most pension packages come with something called the open–market option. This is something everyone should mull over and many people do not because they do not want the confusing hassle of shopping around.

However, finding the right annuity can actually increase your retirement income by as much as 120%. It is absolutely essential that everyone takes the time to shop around in order to capitalise on their potential income gains.

It is important to realise that purchasing an annuity is a once in a lifetime deal. The interest rate you purchase determines what your income will be for the life of the fund.

Here are some tips:

• Keep in mind that the difference between the worst and the best annuity can be as much as 26%. This means that not shopping around could cost you drastically.

 

• Make sure you shop around and be honest about any health concerns or conditions. If you are facing an illness, which might shorten your lifespan, you might be eligible for an enhanced annuity. This can get you a great rate because it lessens the number of years your pension will have to sustain you.

 

• Your income will drop 40-50% when you are pensioned off, making it hard to keep up your current standard of living if your income is not designed to carry you through.

 

• Shopping around can double your pension income and help you maintain your current standard of living longer or support a lower standard of living for double the time.

You can find plenty of information available when you decide to shop around for pension annuities. Remember shopping around can help you double your retirement money and afford you a comfortable lifestyle through your golden years.