How to get the maximum income from your annuity

Annuities are a mystery to most but selecting the right annuity is absolutely vital in ensuring you get the best deal in retirement. Pension annuities are a form of insurance whereby you exchange your pension fund and in return the annuity provider guarantees to pay you an annual income in retirement. They can be bought at any point past the age of 50 but most people tend to take their annuity when they reach retirement age. Once it has been bought of course you cannot make any further contributions to your pension fund. The income level you receive in exchange for your pension pot varies depending on a number of different factors.

Fund value

Those with a larger pension fund will be offered a larger annuity income. However whilst you cannot impact on how much money you have managed to accrue whilst being employed, what you can impact on is the rate you are offered when you buy an annuity by comparing providers for the best deals.

Age

Your age will have a direct impact on the annuity offer that you are made. Older retirees in most circumstances are offered a higher rate as they are expected to die sooner than someone who is younger who is buying a annuity. Many retirees delay taking their annuity specifically because they know they are likely to be offered a higher rate later on in life.

Health

If you are unhealthy or have a medical impairment then this can also have an impact on the annuity income you are offered. Those with ailments or medical conditions that are assumed to reduce life expectancy levels can qualify for what are known as enhanced rate annuities. Depending on what kind of illness you have you could increase your income by as much as 45%. Even if you have milder health conditions you could still potentially increase your annuity offer, so it is important that you declare anything that you think may help to increase your income.

Product

The type of annuity product you choose will also impact on how much money you get. There are many different annuities available which is why it is important you do seek financial advice before committing yourself to an annuity.Not every annuity company will offer you the exact same products or rates. Some specialise in the certain areas such as enhanced annuities but you will only find this out if you receiving the correct advice.

Annuities can only be bought once so making the correct choice is very important indeed.