Finding the Best Pension Annuity Rates - 4 Tips

Pension annuity is the annual sum you will be paid from your retirement plan once you retire. This money should only be part of your entire retirement package, but it typically makes up the large amount of your savings after you finish working. For this reason, many people consider taking the funds from their pension and investing in an additional annuity plan to increase the total sum they will earn over a lifetime. Many investment houses and insurance companies offer annuity plans, and getting the best rate is important in securing your retirement.

Consult an Annuity Table

There are a number of online resources that track annuities. Doing an online search for annuity rate tables will bring you up to date information. The best sources will be credited financial websites or publications; consulting a table published by a company you are not familiar with may lead to inaccuracies. The important thing to look at with these tables is not just the rate of annuity but also the type of annuity. Some types will expire when you pass away, and others will continue to provide your family or benefactors with benefits.

Speak with your Pension Administrator

Pension administrators often assist people in making choices about rolling over a plan or opting for different payment options. It is important to note a pension administrator is employed by your company, not working for you, so may be only able to offer limited information. However, most will be able to tell you about options, where to look and what other employees have considered. You will also be able to determine how much you would be paid in annuities from your current pension by speaking to this person; this will help you determine if you should buy into another annuity plan.

Contact and Annuity Broker

If you would feel better putting your own man on the field, then an annuity broker may be a good option for you. You will have to pay a broker a fee. People hire brokers despite this fee because they believe, over the life of a plan, they will come out on top financially through the higher annuity payments. A good option is to hire a broker for a group of people, such as your associates or friends who have also retired. You can split the cost of the broker and choose to either make the same purchase or different choices based on the information he presents.

Consider a Lump Sum

You do not have to allow your funds to be paid out over your life time. In some cases, you may actually lose money since inflation decreases the value of your annuity over time. If your annuity rate doesn't beat the rate of inflation, then you will have lost thousands of dollars in potential benefits. A lump sum payment may be more aggressively invested or given to your benefactors immediately, prior to your death. Only you can decide which structure is better; some will prefer the annuity because it is a better budgeting tool.

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