When it is time to purchase your annuity there is a very simple way to find out how much income your pension pot will buy you, and that is to use an annuity purchase calculator. This simple device can easily give you the amount of income you will receive.
Many people at retirement go looking for annuity tables to find out how much pension income they will receive, but these tables are very flat and do not take into account the different options you are able to choose. That is where the annuity purchase calculator comes into its own. Simply put it allows you to quickly do an annuity calculation from the size of your pension fund and the options you have chosen.
What options are you able to choose using the annuity purchase calculator?
These are the options:
- Spouse or partners annuity continuing after your death
- Guarantee period
- Escalation of benefits on each anniversary of the annuity
- Value protection
- Tax-free cash option
You do need to remember that the annuity purchase calculator only gives you a guide, you will still need to get proper personalised illustrations for the options you require from the annuity providers. Many people at this stage choose to use a specialist independent financial adviser that can shop around on the open market for the best annuity quotes.