Considering that annuities are a form of insurance which are also referred to as longevity insurance, anyone buying retirement pension annuities should be careful to look for one that will work for them and not just rush out and buy what they feel is the best deal. It is important then to do a little bit of research before you set out to buy a retirement annuity. The following factors should be considered.
Because annuities are long term investment, your money will be frozen for long periods and it is important to plan so that whatever money you find the annuity with is not money that you might need to spend but money that you have planned for annuity purposes only.
It is also important to consider the accumulation period especially if you will be making your contributions in installments. It is better to begin paying for the annuity many years before your retirement for example 15 years before it is always better to take out an immediate annuity with your pension while you also make other investments that will provide you with respectable interests. This provides you with tax exemption returns.
You should be very clear about how much the payouts that you will receive from your annuity are. There some those fluctuate while there are others that are fixed. Ensure that you know the history of the insurer and ascertain their credibility so that your payouts are at least guaranteed.
One of the major benefits that annuities will enable you to have is exemptions from tax. If you have a registered annuity, it will not be exempt from taxed when it matures. If your payout after maturity causes your taxable income to increase at the time of your retirement and the amount is quite considerable, it would be advisable to go for an unregistered annuity.