find more at Buyfave.com

Many people save towards their retirement with personal and occupational pension schemes. Most of the schemes can be categorized as money purchase schemes. This means that when the person retires the money invested in the pension fund is converted to cash and used to purchase an annuity. There are many different options when purchasing one of these products, such as level and escalating annuities, and single life or joint life annuities. This article explains some of those options, and shows how an annuity quotes can be used to let a person estimate the amount of retirement income they will get.

Most pension schemes other than final salary schemes, and other defined benefit schemes, can be categorized as money purchase schemes. A person, and possibly also their employer, make contributions into a pension fund, which is invested in the financial markets with the intention of building up a suitably large pension pot by the date of the person’s retirement.

On retirement the pension pot is then used to purchase an annuity. These are a type of insurance, which are sold by life insurance (or life assurance) companies. They provide a guaranteed lifetime income, regardless of how long the pensioner lives for. This is desirable as it protects pensioners from the danger of exhausting their pension pot.

Those who buy an annuity to provide a retirement income will normally have one of the following types of pension: a personal pension, a stakeholder pension, an Additional Voluntary Contribution (AVC) or Freestanding Additional Voluntary Contribution (FSAVC) scheme, or a retirement annuity contract. Those who are members of an occupational defined contribution scheme may find that the scheme managers purchase the annuity for them, but they are entitled to choose the type of product which they want.

There are many different types of product, allowing the retired person to choose something suitable for their needs. The most basic choice is between a single life or a joint life policy . Joint life annuities will provide a pension for a person’s spouse or partner. These are therefore most normally chosen by couples, unless the spouse or partner already has an independent source of retirement income.

Another choice which can be made is between a level, and an escalating annuity. Level annuities will pay out the same income throughout the rest of a person’s life, while escalating annuities will constantly increase. The increase may be a fixed rate (e. G. 3%), or it may be linked to the Retail Price Index (RPI).

A third option involves a guarantee period. With a standard policy, if the pensioner was to die very soon after buying the annuity, the payments would simply stop. This would mean that the pensioner’s estate did not really benefit from that person’s lifetime of saving. With a guaranteed annuity, the life assurance company will pay the annuity for some predetermined period (usually five or 10 years) even if the pensioner dies.

All these options affect the amount of retirement income. For example a joint life policy will pay out less than a single life policy, because the life company have the additional commitment of funding the spouse’s pension. An annuity quotes is a simple online tool, which allows a person who is approaching retirement to estimate the effect of different options on their retirement income.

When approaching retirement it is vital to shop around using the open market option and to make sure that you use a broker that advises from the whole of market for annuity quotes.

Find More Best Home Businesses For People 50+ Articles

Popular Products:

Home Business 101...How To Make Money on eBay: Get on the FastTrack To PowerSeller StatusHome Business 101...How To Make Money on eBay: Get on the FastTrack To PowerSeller Status Rave Reviews:

"I've sold a few things on eBay, but could never figure out how to scale it up. This book has shown me how to turn a hobby i... Read More >
TurboTax(R) Home And Business 2016, PC/Mac, Traditional DiscTurboTax(R) Home And Business 2016, PC/Mac, Traditional DiscJourney into tax season with intuitive software that helps you complete taxes quickly and accurately. Industry-specific tax deductions make it easy to... Read More >
Network Marketing Recruiting: Business Network Marketing MLM Passive Income  (Recruiting Home Based Business Entrepreneurship Book 1)Network Marketing Recruiting: Business Network Marketing MLM Passive Income (Recruiting Home Based Business Entrepreneurship Book 1)Learn How To Recruit Like The Pros In Network Marketing

You’re about to discover how to be a network marketing recruiting machine for you... Read More >
Home Business: How To Start A Profitable Business From Your Home!Home Business: How To Start A Profitable Business From Your Home!In this challenging economy, we can no longer do business the way it used to be done. Profitable business owners know how to leverage technology and p... Read More >
Microsoft Office Home and Business 2016 | 1 user, PC Key CardMicrosoft Office Home and Business 2016 | 1 user, PC Key CardNew, modern versions of the classic desktop applications, Word, Excel, PowerPoint, Outlook, and OneNote, are built for maximum productivity. You'll qu... Read More >
TurboTax Home & Business 2016 Tax Software Federal & State + Fed Efile PC download  [Amazon Exclusive]TurboTax Home & Business 2016 Tax Software Federal & State + Fed Efile PC download [Amazon Exclusive]

Get your taxes done right with TurboTax 2016
TurboTax is tailored to your unique situation—it will search for the deductions and credits you... Read More >