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Category

😹
Fun
Transcript
00:00Michael asks about the pros and cons of annuities versus drawdown for providing retirement income.
00:06The benefits of annuities is that the income is guaranteed. It can be tailored to some degree,
00:11so you can include provision for your partner or have the income increase over time. Also,
00:16rates are much higher now in early 2023 than they've been for over a decade,
00:20so they're worth checking out. The downsides are that you can't usually reverse the decision
00:25to buy an annuity once you've done it. Once you've handed over your money to buy the annuity,
00:29it's gone, but there are some versions which will give you some money back at the end.
00:34Now, with drawdown, you retain your funds and you invest them hopefully well enough so that they
00:40last the rest of your life. There is flexibility there and the ability to leave the fund to your
00:45family if there's anything left. The downside though is that you might run out of money.
00:50Costs will drag on your performance and potentially, different kind of risk this one,
00:55the risk that you might not spend it all. No sense in dying rich, right?
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