Who should consider using a living annuity?

A living annuity can be an excellent choice for many retirees, but it's not suitable for everyone. Here are the key factors to consider when deciding if a living annuity is right for you:

Financial Situation

• You have substantial retirement savings that can sustain your desired lifestyle at a reasonable drawdown rate (ideally 4% or less per year).
• You have other sources of income or savings to supplement your annuity if needed.

Risk Tolerance

• You're comfortable with some investment risk and can handle market fluctuations.
• You understand that poor investment performance or high drawdown rates could deplete your savings faster.

Flexibility Needs

• You prefer having control over your investment decisions and income drawdown rates.
• You want the ability to adjust your income based on changing circumstances.

Health and Life Expectancy

• You're in good health and expect to live for many years in retirement.
• Alternatively, if you have health concerns, you may prefer a living annuity for its flexibility and ability to leave remaining capital to beneficiaries.

Legacy Planning

• You want the option to leave any remaining capital to your beneficiaries after your death.

Future Plans

• You may want to convert to a guaranteed annuity later in life.

While a living annuity offers many benefits, it also comes with risks, primarily the possibility of outliving your savings. It's crucial to carefully evaluate your personal needs, circumstances, and priorities before making a decision.