Which annuity is better?

TWO MAIN OPTIONS AVAILABLE TO PROVIDE YOU WITH A RETIREMENT INCOME

- Justin Wendover

Selecting the correct annuity is critical, but you are not limited to one option.

When it is time to retire from your retirement funds (pension, provident, retirement annuity and preservation funds), there are essentially two main options available to provide you with an income (pension) - a guaranteed life annuity or a living annuity.

As financial advisors, we are often asked which annuity option is best. The two main annuity options intentionally differ, in fact they are almost opposite of each other, each with their own advantages and disadvantages.

These differences exist to help ensure that you can select an annuity option that best matches your individual life circumstances, goals, and objectives.

Guaranteed life annuity

A guaranteed life annuity is a solution that is typically offered by a life insurance company. An insurer will quote you a monthly pension (income) based on factors such as your age, gender (and that of your spouse), the purchase sum and whether you want annual pension increases or not.