Annuities are the most common investment choice for those looking to secure their pension once the 25% tax free cash has been withdrawn. Yet without an annuity calculator, savers could find themselves trapped in a plan that does not offer value for money. In general, fixed rate annuities are considered to be the number one safest way to invest because they offer a fixed guaranteed rate meaning your money is secure. Other annuity types include an investment based option which is riskier, but potentially more lucrative, because they are based on the stock market.
Hidden Risks
Although fixed annuities are safe, they hold a risk of their own. Without an annuity calculator, you could find yourself locked into a lifelong contract with a company offering a dreadfully low rate. This is why you need to see an independent financial advisor as they will guide you through the various annuity options on offer, helping you choose the one that produces the greatest level of income.
An annuity calculator is not that difficult to use. In fact, you only need a small amount of easily provided information. For example, you need to enter your gender, age and cost of the annuity when it was purchased as well as your partner’s pension. Other information that should be added for an accurate reading includes the rate of escalation and whether or not it is guaranteed. Once you have entered these requisite details, you should get a list of results detailing what you can expect to earn from various annuity providers.
Although annuities are supposed to be the easiest way to invest, it can still get a little complicated, especially with the large number of providers offering seemingly different deals. Speak to your financial advisor and he/she will help you clear the muddied waters. Enter your details on the annuity calculator below for details on how much you can expect to earn from annuity providers.