subject: Income Drawdown: How To Beat Low Annuity Rates By Using Income Drawdown [print this page] Also known as pension fund withdrawal or unsecured pension, income drawdown gives you an opportunity to keep a certain amount of money invested and take a portion of it as income through income drawdown. Income drawdown gives the opportunity to the retiree to receive funds from his own pension fund till he is ready to buy an annuity for himself.
Income drawdown is an ideal option for people who have various sources of income post retirement and hence they can take a higher risk as this. Owing to this risk component involved, this income drawdown option is available only through select avenues.
There are however many benefits with the income drawdown option as one can delay buying their annuity to a later age and still have access to some regular income. the retiree is having full control of the amount he wants to take as income and when he wants to take it too, of course, all falling in tune with the regulations set forth by the government.
Through income drawdown option you gain access to a wide range of choice as to where you could put your money in, in diverse range of fundsso that you could beat low annuity rates. One important point to make a note here is that there is a chance for the annuity rates to improve as well as worsen depending on various other variables. Therefore, the amount you are permitted to draw has to be reviewed at regular intervals as it is bound to fluctuate and affect your income limits.
Owing to numerous other factors like interest rates, inflation, annuity rates it might so happen that when you have taken a major share of income and the returns are poor, the value of your fund might get affected very badly. This will result in your getting low income for you will not have much to buy your annuity with. Therefore, take the help of an annuity broker to understand the depth of the concept.
