What is an Annuity and Do I Have to Get One?

Annuities are something that quite honestly confuse many of us, when I started looking into annuities I felt completely overwhelmed by the sheer amount of information and the sheer number of annuities that were available. After taking my time and really working through this information I now know that I have a good understanding, but that it also takes a long while to get there.

Retirement is something that we all worry about, even from a young age, and when we hit that age it’s so crucial that we have the financial security that we all so desperately seek. One way that many people go about this is by investing in an annuity which in turn can help to provide a person with a secure income for the remainder of their life.

So, what is an annuity?

An annuity is essentially a series of payments that you receive during your retirement which act in the same way that a traditional wage would. When you reach retirement you put a certain amount of your pension fund into an annuity service and in return they will provide you with a certain level of income for the rest of your life.

Annuity rates are not standard and they do change for each person as there are a number of elements which need to be taken into consideration. Health, lifestyle habits, location and age are all seriously considered within an annuity payment, and the payment in general will be determined by your life expectancy, so expect your annuity provider to take these elements into consideration.

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If you are currently suffering from poor health conditions, lifestyle habits or you are substantially older than the traditional retirement age, you may be able to apply for a number of enhanced or impaired annuities which take these factors into consideration and can generate you a higher annuity income as a result.

Ok, I’m interested! Where do I get one?

Annuities are popular because they are a guaranteed source of income, and for anyone in retirement this can be a really great selling point. Security is what many people search for throughout their retirement and an annuity can often give a person this  hence the appeal of it  if this is what you are looking for then you will find an abundance of annuity companies out there waiting to help.

Take your time, shop around and get the best deal, there will always be people there to help you with your decision, ensuring that you get exactly what you are looking for.

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