Find the Best Guaranteed Annuity Rates Using the Open Market Option
Find the Best Guaranteed Annuity Rates Using the Open Market Option
Guaranteed annuity rates are the most popular form of annuities and can be found using the open market option. The open market option was introduced to let retirees find guaranteed annuity rates from the entire market avoiding being forced to purchase the rates from the pension company they had saved with.
There are many different types of annuity that can be purchased at retirement, but by far the most popular is the guaranteed annuity, this is because of the guarantee that the income cannot fall during the life of the retiree. Those in retirement require certainty of income and do not want to worry about watching their annuity rates. Of course because the rates on guaranteed annuities are fixed there is no scope for income increases during retirement, meaning the longer you live inflation could eat into the buying power of the income.
Just because the name guaranteed annuity sounds as though the income cannot increase does not mean you cannot have escalating income, you can purchase an option for your guaranteed annuity to increase each year either by a fixed percentage or by the retail price index, this will mean the starting income would be lower than a guaranteed annuity without the options.
There are other options you can purchase when you buy guaranteed annuity rates, one of the most important and popular options is the continuing pension for spouse or partner, this means in the event of your death the pension can continue. The pension can continue at a percentage of the pension or a the full rate, again the starting income is lower and the more you wish to be paid as a continuing pension the lower the starting income of the guaranteed annuity. Other options that can be purchased at the same time are a guaranteed payment period and value protection, which pay out a amount to protect you if you die in the early years of retirement.