The big R cometh

zygurat789

But if you don't want to be bothered or have to make important decisions then you're left with the annuity options I outlined at the beginning and I'm just looking for some logic to help make a choice on each one. I have made a choice between flat and indexed for the reasons above. Anyone have any thoughts?

EdInvestor

zygurat789 wrote: »

But if you don't want to be bothered or have to make important decisions then you're left with the annuity options I outlined at the beginning and I'm just looking for some logic to help make a choice on each one. I have made a choice between flat and indexed for the reasons above. Anyone have any thoughts?

Difficult times demand a little more effort if you want to obtain a solution that is more optimal for your needs.

Also, the retirement planning market is evolving quite a bit at present with a number of useful new products emerging.

It's not the time for laziness or complacency if you are seeking value for money.

zygurat789

EdInvestor wrote: »

Difficult times demand a little more effort if you want to obtain a solution that is more optimal for your needs.

Also, the retirement planning market is evolving quite a bit at present with a number of useful new products emerging.

It's not the time for laziness or complacency if you are seeking value for money.

Yes but you are all very much biased to the preretirement age group there is, by comparison not very much on actually doing retirement from the financial standpoint. I was hoping for a totally diferent response and if your attitude and that of dunstonh is typical I wonder if it's worth my while approaching an IFA at all. It's not a question of laziness it's that you dont have any experience of the problems

TMFTP

The point, zygurat, is that (assuming you are <75) you are still IN the "pre-retirement" group. You do not HAVE TO retire.

So your choice will be driven by a whole bunch of factors it's impossible to go into here - things like your age (your income is likely to go up if you delay retirement), any spouse / dependents (income is likely to be higher if you are single), health (income can be increased if you're ill), life expectancy (income may be higher if you live in an area where people don't live longer), other investments (enabling you to delay retirement), your level of financial knowledge (could you manage a drawdown product if one was set up), required level of income (again, do you NEED to retire now), attitude to risk (are you happy to delay retirement? What about With-Profits or other asset-backed annuities?).

You can't just post one- or two-liners on a forum and get a comprehensive answer to the queries you have. Whereas an adviser can sit down with you and run through the RELEVANT options and consequences at your leisure.

You have lots of questions - but that's EXACTLY as it should be. This is NOT a simple transaction - on par with buying a house. But unlike buying a house, if you decide afterwards you don't like it, it may be too late to move. Don't feel like you're being obtuse, or that anyone is deliberately unhelpful. A decent adviser will appreciate you won't have any experience of retiring and should treat you accordingly.

zygurat789

TMFTP wrote: »

The point, zygurat, is that (assuming you are <75) you are still IN the "pre-retirement" group. You do not HAVE TO retire.

So your choice will be driven by a whole bunch of factors it's impossible to go into here - things like your age (your income is likely to go up if you delay retirement), any spouse / dependents (income is likely to be higher if you are single), health (income can be increased if you're ill), life expectancy (income may be higher if you live in an area where people don't live longer), other investments (enabling you to delay retirement), your level of financial knowledge (could you manage a drawdown product if one was set up), required level of income (again, do you NEED to retire now), attitude to risk (are you happy to delay retirement? What about With-Profits or other asset-backed annuities?).

You can't just post one- or two-liners on a forum and get a comprehensive answer to the queries you have. Whereas an adviser can sit down with you and run through the RELEVANT options and consequences at your leisure.

You have lots of questions - but that's EXACTLY as it should be. This is NOT a simple transaction - on par with buying a house. But unlike buying a house, if you decide afterwards you don't like it, it may be too late to move. Don't feel like you're being obtuse, or that anyone is deliberately unhelpful. A decent adviser will appreciate you won't have any experience of retiring and should treat you accordingly.

Did you bother to read the OP?

EdInvestor

zygurat789 wrote: »

The big R cometh and it is time to make a decision. I would imagine that an annuity is the most popular method of providing a pension but now the problems begin. I think there are:-
Flat rate or indexed
Single or joint life
Assured value or not
Guaranteed or not
Are there any other options?

This is an edited version of your OP.

It demonstrates a general knowledge of a fairly narrow area of traditional retirement planning.You also ask about other options.

Answers have mentioned other options and rounded out the ones you mention.But if you want a reply which is specific to your actual circumstances, and focussed on one or more particular approaches,then you would have to supply a lot more facts and figures about your personal finances.

This may not be a suitable approach for a bulletin board.

You also say I have no experience of 'the problems' (of retirement, I assume).What makes you say that?You are wrong.It is you that has no experience of the problems, it would seem.

zygurat789

EdInvestor wrote: »

This is an edited version of your OP.

It demonstrates a general knowledge of a fairly narrow area of traditional retirement planning.You also ask about other options.
Narrow, by what definition? Can you produce figures to back that up, if so, show them.
Answers have mentioned other options and rounded out the ones you mention.But if you want a reply which is specific to your actual circumstances, and focussed on one or more particular approaches,then you would have to supply a lot more facts and figures about your personal finances.
My circumstances are not relevant and only one other option, third way annuities, has been mentioned
This may not be a suitable approach for a bulletin board.
I thought bulletin board were all about discussing things
You also say I have no experience of 'the problems' (of retirement, I assume).What makes you say that?You are wrong.It is you that has no experience of the problems, it would seem.

How old are you ? How many times have you retired?

From your posts you seem to be unaware that as people age they tend to lose their faculties , to a greater or lesser extent, and unable to cope with simple demands that they would have easily dealt with a few years before. In these, and other, circumstances an annuity which involves no further effort or decisions, is attractive. There is more to life than money.

jamesd

zygurat789, here are some thoughts on the various annuity options and why you might use each:

flat or indexed: indexed is likely to be the best main choice for most people who don't have a short life expectancy, remembering that half of 65 year old men are expected to live until they are 88. indexed cuts the initial payout a lot but passes it once you get to average and longer life so it's effectively insurance to protect your income if you life as long as half or more of the population. It's possible to do a bit of each and that can be a good idea because spending tends to decline as people get older and less mobile. So the flat annuity provides higher initial income while the indexed one provides some protection longer term.

joint life: income drawdown is likely to be a better alternative and always needs to be considered if joint life is being considered. If income drawdown is rejected or used temporarily then taking the additional reduced payout for a joint life annuity means the spouse will get a proportion of the income after the first partner dies. The proportion can be selected and it's usually 75% or 66%. The key criterion here is to work out how much income the spouse with least other income will have and try to arrange enough joint life annuity to keep them decently well off. Then other annuities can be used for more optimistic provision that pays out more in earlier years or if both are still alive.

guaranteed value is mostly of interest to single life annuities. Guarantees that the payment will be made for a set number of years after the annuity is purchased so some value is delivered even if you die quickly. For a joint life annuity it's mostly pointless because it reduces income but neither spouse will be alive to benefit. Can be of some small use for inheritance planning since the money goes to the estate but buying life assurance is likely to be better for that purpose.

assured value: I don't know what you mean by this. All mainstream annuities have a guaranteed value for life. Maybe this is a feature of some third way or alternative annuities.

If either spouse is overweight, smokes, shows any sign of alzheimers or has any negative health risks it's vital to discuss those with an IFA. Any of those things can result in higher, sometimes substantially higher, payments via an enhanced or impaired life annuity. You can't get any useful online quotes for these types of annuity.

dunstonh

If either spouse is overweight, smokes, shows any sign of alzheimers or has any negative health risks it's vital to discuss those with an IFA. Any of those things can result in higher, sometimes substantially higher, payments via an enhanced or impaired life annuity. You can't get any useful online quotes for these types of annuity.

Even as little as high blood pressure and cholesterol can improve the terms.

EdInvestor

http://www.moneysavingexpert.com/savings/annuity-guide

Here you are zygurat789, a new Annuities Guide from MSE.Looks like it covers all the basics, just what you want.

If you feel like something a bit more sophisticated later, feel free to come back and raise some more questions.I will desist from taxing your brain any further with new ideas.;):)