subject: Annuities - When Should You Start Looking? [print this page] For many people, retirement may seem too far into the future to worry about, but this is an issue where a bit of forward planning can make all the difference. Although annuities are only offered to the over-50s, with an unstable economic climate the financial future is far from certain which makes planning ahead a wise idea.
It is seen as a good idea to start researching annuities and planning for your retirement long before you reach retirement age as planning ahead means that you will have a sound financial plan in plenty of time. Many online financial advisory sites advocate beginning to plan your annuity five years before retirement, although this process could be started many years before this is order to get the best option for you.
Planning an annuity and your finances for retirement in advance has many obvious advantages. The sooner you start to save for retirement, the more assets you will have once it is time to purchase an annuity is one of the main reasons you should plan for the future. Many people choose to buy an annuity before they retire without having had a pension previously, although you also have to purchase an annuity if you have paid into a pension throughout your working life; however if you choose to do the former, planning well in advance is a good idea.
It is especially important to plan your retirement funds in advance given that rates for annuities are falling. As they are affected by interest rates, insurers base their rates on how well their own investments perform and with our economic instability this has mean dramatic falls in annuity rates. Other aspects may also affect annuity rates; for example, the increasing life expectancy can also make rates fall. Looking for the best annuity ahead of time, and becoming aware of potential pitfalls and better deals means a more stable financial future.
Purchasing an annuity ahead of the cut-off age of 75 means that you could boost your retirement income by up to 10%, simply by shopping around and looking for the best rates available. Simply by switching from one pension provider to another with better rates can dramatically increase your income, meaning that allowing a good amount of time before you retire to explore your options is often the most financially sound route.
