When under money purchase, a type of scheme categorized as a form of company pension, you and your employer will raise a fund for your retirement. This fund will normally be used to buy an annuity, or regular income, which is received yearly.
It is normally used to buy annuity, but in some instances when not yet interested in having annuity, the other option is to have unsecured pension. Sometimes referred as income withdrawal or drawdown, it lets you acquire income on your retirement from your fund which is still invested on the same scheme.
Although it is a risky business, for your invested fund will all be nothing if the investment itself goes bankrupt. Not to mention the negative effects of delayed purchasing of annuity. It is a commonly used type of pension for it offers a lot of enticing features, which includes:
- The flexibility on your income. With this, you can vary the amount you receive from minimum to maximum limits. Even the period of time when to acquire your profits can vary from monthly to quarterly to yearly.
- The opportunity to have firm control over your money while it is invested.
- The opportunity to choose your own death benefits.