The decision about whether a retiree should opt for index-linked annuity rates and an index-linked annuity income is a difficult one to make and getting annuity advice can help.
Getting annuity advice is important because there are many factors to consider before buying an annuity with/without index-linked annuity rates.
A retiree needs to decide what the future inflation rate is going to be and whether they are likely to live long enough to actually gain any benefit over the longer term.
Depending on their life expectancy and the actual inflation rate in the future, if they do choose to receive an income that increases by inflation each year, there is a real danger that they could die before the increasing income ever catches up with the income that they would have received from an annuity paying a level / fixed income.
However, what happens if they defy the odds and live to a ripe old age and the buying power of their annuity income is significantly reduced over time? Would they have enough income from other sources to pay their way?
Should a retiree take the higher level / fixed annuity income now and take a ‘live for today’ attitude or take the safe route and be less well off now but be potentially safer over the longer term?
An annuity adviser can obtain a range of annuity quotes so that a retiree can make an informed decision about their annuity choices.
This is important because, once bought, a conventional Lifetime Annuity cannot usually be changed. The options that are selected at outset will remain with the retiree for the reminder of their life.
If you are unsure about which course of action to take, why not get index-linked annuity advice and quotes from annuity adviser before you commit yourself to an irreversible decision?