An annuity is using your accumulated pension fund/s to purchase a future income.
You can purchase an annuity from all of the major life insurance companies
An “open market” option applies and this means that you are not restricted to purchasing the annuity from the company where you built the pension fund.
In practise, this means that you can shop around and find the company who will give you the best income.
Many people buy annuities that provide an ongoing income for their spouse in case the spouse lives longer
Some people select indexation options.
Incomes for a guaranteed time period are also available
These and other options depend on personal circumstances and the income objectives at the time the annuity is being purchased.
An annuity may suit your post retirement income needs when you would like to be certain of an income for you and your spouse or you do not want invest your pension fund in an Approved Retirement Fund. (ARF)
Annuity decisions are closely linked to known future income requirements at retirement day
There is no need to make any decision until retirement day. Make certain that it is part of your retirement planning and options to consider but to keep everything flexible until the time the decision has to be made.