“Shopping for Extra Income”
There are a great number of people who, when it comes to deciding how best to derive an income from their retirement savings, may not get the best deal if they do not shop around.
The wrong choice at a time when financial pressures should be reducing can result in less income being paid than could actually be achieved.
This can easily be avoided.
It is estimated that many retirees are entitled to a better retirement income than they are currently being offered – in other words even though they could qualify for a better income they don’t know how to get it. One of the reasons for missing out could be that this group is not given enough information about how to use their pension fund on which they can make an informed decision.
During the course of their working lives many people have saved money into one or more pension plans. As they approach retirement there are a range of options available to use these funds to generate an extra income.
The most simple of these is to understand that there is no obligation to have to take the retirement income from the pension company where the money has been saved. The service that is known as Open Market Option (OMO) is a facility to shop around for a better rate and this can help improve retirement income significantly.
It has been estimated that up to an extra 19%* extra income could be generated through researching for an annuity (income) rate that is better than the one offered by the original pension company. Nearly 750,000* people will reach retirement age this year and many will be wasting the opportunity to get the best out of their retirement savings. This puts them at risk of having a less financially secure retirement than they deserve.
The choices that people face when having to decide how best to benefit from the pension savings that they built up through their working lives is challenging.
This is a complex matter because beyond shopping around for the most competitive rate, there are 11 different income options and each of these can be tailored to a meet a retiree’s particular circumstance.
Make the wrong choice and not only could there be less income but more tax than is necessary could have to be paid. Some people can find themselves locked into an option where once committed there is no way back or not having made adequate provision for dependents.
Shopping for extra income is as simple as searching any annuity comparison website, getting advice on an appropriate at retirement income option however needs input from a specialist independent financial adviser.
For an initial consultation about acheiving extra income at our expense please contact Gordon Tate Associates on Tel: 023 92 571183
* Information supplied by Just Retirement.