I’ve been using a utility called pension prophet on Irish Life’s pension planet web site.
The annuity offered there appears to pay about 5% p.a. of pension fund per annum to those retiring at 65. e.g. 100000 fund on maturity gives payment of 5000 p.a. annuity.
Is this a good return?
Is there anywhere I can find details of annuities provided by other pension providers.
I should be able to choose my annuity once my pension matures. Is there any website that covers this?
Acknowledgement(for the benefit of SQR64):Websites are not an alternative to sound independent investment advice.
dipole at the minute annuity rates are low but tend to fluctuate up and down over time, also it actually depends on when you retire as to what annuity rates are available. What I mean by this is you might be lucky and rates could be higher when you retire. You can get annuity rates by simply calling a life company to get their current rates.
But let me give you some food for thought, financial services and the rules governing pensions etc will change over time so to expect the current rules and rates to govern your retirement is not being fair to yourself.
Also one of the things I advise personal pension clients is if you are retiring and rates are low you should consider putting your money in ARFs as you can always purchase an annuity when the rates go up but still benefit from growth in your fund in the meantime.
From a personal perspective I will never purchase an annuity as I will not sign away my right to control and grow my investment unless Im in nappies and drooling.
In your case there are things you need to be aware of and they are with a company pension scheme you are probably entitled to 1&1/2 times your final salary as a tax free lump sum with the rest to purchase an annuity and give you an income.
In a personal pension or PRSA you are entitled to 25% tax free lump sum and the option to purchse ARFs or an annuity so before you retire you need advice and not just from a website as you said yourself. You might be able to work out which is the greater tax free lump sum and therefore more beneficial to you and its not always 25%. Good hunting.
OK. Will I as a member of a defined contribution scheme in a private company, be able to purchase an ARF or am I going to be railroaded in to an annuity.
Is there no site out there at the moment which allows you to compare annuities on offer at present for those approaching their 65th birthday.
There are websites for comparing other financial products e.g. loan rates, deposit rates, car and home insurance
I didn’t find anything but gobble-de-gook on pensionboard.ie
If you switch out of the company scheme to a PRSA before retirement you will be able to purchase an ARF/AMRF etc but if you remain within the company scheme you will have to purchase an annuity after your tax free lump sum. BUT as I said before things could change between now and then and you are better getting advice on the subject closer to the time.
If you want to compare annuities either check out the various life companies websites (which may or may not give advice or simply email, ring the various companies asking for it. I think New Ireland are giving more than ILAC at present but I stand to be corrected.
Indeed, people who retired between 2003 and 2005 got shafted. They were forced to purchase an annuity at really low rates as the ECB rate was just 2% at the time. And now inflation is at 4% !!!
This sounds like good advice. I’d never heard it before.
If you do this, can you bring all your employee and employer contributions with you into the PRSA? And can you do this voluntarily even if you are not changing employment, or the employer is not changing their pension scheme?