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Editor’s note: This is a guest post from Scott Artichoke
There has been a lot of coverage in the press about raising the pension age for many public sector workers to fit in line with the longer life expectancies that we now have in this country. Many people have discovered that they may need to work longer, perhaps until they are around 68, in order to get the pension that they want.
Choosing your annuity is therefore a very important task. It is up to you to shop around for the best annuity rates and decide what kind of annuity would be best for you.
If you want something secure that will not be affected by inflation or the state of the economy, perhaps a fixed rate annuity would be an ideal choice for you. Fixed rate annuities mean that whatever is happening in the industry your set amount of money will be received each month regardless of anything else. You can choose your best fixed annuity for a certain amount of years or some annuities are fixed for life if you would prefer to not have to worry about it again.
Once you sign the paper for the annuity, you are locked in. There is no going back so you must ensure that you have made the right decision.Some fixed term annuities are slightly more flexible and will award you with a “bonus” income should inflation rise by a certain amount. This means that you can still prosper should the industry pick up and you can benefit from the rises.
There are lots of other types of annuity which you may not be aware of. One is an enhanced annuity, which may be awarded for a whole host of reasons. For example, you may be awarded an enhanced annuity if you have had or are suffering from a medical condition which might affect your life expectancy. This might be something more serious like cancer or something minor like high blood pressure or asthma. You might also be awarded enhanced annuities if you have diabetes. Your location might also affect your ability to receive an enhanced annuity. In poorer areas life expectancy is lower so you may be entitled to higher annuity rates.
It is always worth checking before fixing on any kind of annuity that you have made the best choice for you and your money, because there is no going back after you have signed the deal. This is known as the open market option.
Scott Artichoke has worked in the financial industry for many years and recently started sharing his knowledge and experience online to try help people make better financial decisions in this tough economic climate.
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