The Role of Annuities in Retirement Income Planning

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People who want to convert their pension savings into an income generally opt for an annuity because they are considered as secure, offering people a regular fixed income for the rest of their lives.  However, you may decide you don’t want to go down that route because there are other options available to you. You could invest your money so you can draw on it if and when you need to, but the thing to consider is the extra risk that’s involved. On the up side, you may well have a much higher return on your investment. The role of annuities in retirement income planning, however is a much safer route to take because the risks are lower although not non-existent and you should have an adequate income when you retire.

Putting money into a pension fund means a comfortable retirement

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Making Sure You Choose the Right Annuity

Income annuity planning means you have looked into the various options available and decided to take out a plan that will provide you with a regular fixed annual income that will ensure you have a comfortable retirement. However, you need to get it right and if in doubt, seek the advice of an independent financial adviser. You need to be sure that what you set in place will in fact, offer you the kind of return you had hoped for that will see you through your retirement.

You cannot at a later date decide to change annuity providers even if the rates they are offering are better than that of your existing plan. This means you need to take your time and do as much research as possible on the annuity plans you are considering buying and to find out which provider is offering the best rates.

Although the annual income you receive may fluctuate according to which type of investment your provider uses to fund their plans, annuities are thought to be one of the more secure ways to ensure your money works well for you so that it offers an acceptable annual income when you retire.

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Things to Factor into a Decision

Inflation keeps on rising which means the cost of living in the future may leave you with a retirement income shortfall but there is annuity you can choose to buy that stays in line with inflation. This means that when you do retire, the annual income you receive will have kept up with the ever increasing cost of living ensuring you are comfortable during your retirement.

As long as you don’t opt for an investment-linked annuity, your annual retirement income will not be affected by any fluctuations the stock market might suffer. You will receive a regular fixed income until the day you die which is why many people choose to go down the annuity route. However, you need to make sure the rate you are quoted will give you enough money to live on during your retirement. However, you also need to factor in the fact that many annuity providers offer lower rates to compensate for the fact that people are living longer and therefore they have to pay out over longer periods of time.


Planning an income for your retirement means sitting down and researching all the options that are available to you. Annuities have for a long time been one of the routes that many people like to consider because there is a choice of annuities to suit most people’s retirement needs. Annuities are considered as one of the safest options for creating an acceptable annual retirement income, visit for further information. They do not hold the same risks as many other options do. The thing to remember is that the riskier an investment is, the higher the return but most people want to feel secure in their latter years which is why they choose to buy annuities.


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