Everyone by now must know that annuity rates are at their lowest for 15 years and those that dont must walk round with their eyes shut. retirees need new retirement income solutions to see them through their retirement years. Longevity has increased and many face living 30 years or so in retirement, without flexible retirement income solutions they are likely to run out of income.
For many retirees annuity purchase will be the only option available, those people with small pension pots that need the security of a fixed income for the rest of their life and cannot afford to take any investment risk.
For others with larger pension pots, they will be looking for more flexible options for their retirement income, and will want to delay full annuity purchase as long as possible. So what are the flexible retirement income solutions for 2010 and beyond?
Maintaining flexibility
Let’s take a typical client needs an income of £12,000 to live on. He feels that he needs some flexibility in the short term and does not want to commit to buying an annuity yet. If he takes too much risk then when he does come to buy an annuity he will not have sufficient invested still to buy the £12,000 he needs to live on. And if he minimises risk in the early years he may be not be able to afford to cover day to day expenditure before annuitisation.
It is certainly a conundrum and this is why we advise you to seek the help of an independent financial adviser before making serious decisions around retirement income solutions.
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