What is an annuity? Pension annuities explained

An Annuity is a simple retirement payment option that guarantees to pay you a particular amount every month throughout your life in retirement.

How does an Annuity work?

After you have taken your retirement tax free lump sum you may be able to choose between an Annuity and/or an Approved Retirement Fund. An annuity is designed to provide you with a regular and guaranteed income for the rest of your life. It is important to choose an annuity that reflects your needs and those of your spouse in retirement, so seeking financial advice before you make a decision is important.

Why choose an Annuity?

Annuities may be more suited to people who wish to avoid potential risks, and would prefer a guaranteed income for their retirement. There are different advantages to taking out an Annuity and/or an ARF. Our 'Post Retirement Guide' will help you understand the difference between these products. If you are unsure of the option that best suits you, call our Financial Planning Team on 1850 804 164 and they will guide you through the process.

Types of Annuity

There are a number of choices you need to make when purchasing an annuity: A Single Life Annuity is payable for the rest of your life only. With a Joint Life Annuity, a percentage of your pension is payable to your spouse after you die. If you choose to include a Guaranteed Period, your pension will be payable for a minimum of the guaranteed period, even if you die during that time. A Level Annuity means payment of the Annuity remains the same throughout your life and an Escalating Annuity means payment of the Annuity increases at a fixed rate each year.

Help is at hand

No one starts out knowing exactly what they'll need for their retirement years or what taxes and charges they will incur. With so many different plans and options available we all need some help making the decision that's right for us. Thankfully, you're not alone. From pension calculators to financial advisors, there's plenty of help available. Use the ARF or Annuity tool Use the ARF or Annuity tool to see which option might be more suitable for you at retirement. There's no right or wrong answer as to which option is better - just which one is better for you (based on the information you provide).

Tools to help you choose

Use the ARF or Annuity tool to see which option might be more suitable for you at retirement. There's no right or wrong answer as to which option is better - just which one is better for you.

Use the Retirement Drawdown Calculator to look at the different options available in retirement. It compares the benefits of investing in an Approved Retirement Fund (ARF) with those of an Annuity.

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Post-Retirement Brochure

The information contained herein is based on Zurich Life's understanding of current Revenue practice as at January 2023 and may change in the future.

Warning: Past performance is not a reliable guide to future performance.

Warning: Benefits may be affected by changes in currency exchange rates.

Warning: The value of your investment may go down as well as up.

Warning: If you invest in these products you may lose some or all of the money you invest.

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