Few of us ever give much thought to retirement when we’re in our 20s and 30s. But with each passing year, the subject of retirement income becomes much more pressing.As with any type of saving, the earlier you start the better.

In the case of retirement, the earlier you start thinking about saving, the more time you’ll have to explore all of the different retirement income options you will be presented with when you reach pensionable age.

The Different Types of Retirement Income

Contrary to popular belief, a pension does not necessarily refer to the income you will receive in retirement. A pension refers to money which has been saved for retirement, but when you reach retirement age this pot will then need to be converted into income by choosing one of a variety of options. These include, but are not limited to:

Each of these options includes within it various different subtypes, all of which refer to a different method of securing retirement income. And each option has both benefits and drawbacks, which need to be taken into consideration when choosing your retirement income plan.

The most popular of these options is the annuity. An annuity is a retirement income product, which is purchased with the sum (either part or full) of your pension. It is essentially an agreement with your provider that they will provide you with retirement income in exchange for the sum of your pension.

Choosing an Annuity

If you’re thinking about purchasing an annuity, the type you choose should be dependent upon your needs, health and lifestyle. This is because there are many different annuity types, each of which have their own specific criteria.

For example, a fixed life annuity will guarantee you a fixed income for the remainder of your life after you retire, whereas an escalating annuity will increase your income every year, in line with inflation, and an investment linked annuity will provide you with an income which is linked to the performance of your invested pension sum. There are also other types of annuities which are specifically designed to meet the needs of people with health problems. Enhanced or impaired annuities will pay out a higher income for a shorter amount of time.

If you decide to purchase an annuity, it’s always a good idea to get expert annuities advice from http://www.nononsenseannuities.co.uk/ beforehand. Their expert advisors will make sure you purchase the right annuity for you, meaning that you’ll be able to make the most of your golden years without worrying about your income.

Enhanced by Zemanta