Annuity savers have to hope they grow old. Indeed, it can take decades before the payment of such a personal pension savings fund exceeds the purchase costs, according to research by price comparator MoneyView. Alternatives are there, but involve own risks.
“ With the average life annuity paid for some products, you have to live a long time before you can remove the purchase price of the benefit product from the pension,” says MoneyView researcher Marcel Beijer. “Last year you had to grow 97 years old, this year even 98. In other words, from age 98, you‘re going to make some return on your purchase price.” So it’s important to choose right.
Investing after your pension
With the low interest rate, which means that your pension pool no longer automatically generates extra money, there will also be more and more opportunities to continue investing with your pension pot after your retirement date. You can choose to have the entire pension pot or part invested.
If you do allow your money to continue investing, you have to deal with everything you have to deal with with with a ‘normal’ investor account: you have potentially more returns, but you also have the risk of reducing your pension fund. There is still too little known to take into account in current studies, explains a MoneyView researcher.
“ With an investor horizon of about twenty years, you still have a fairly long period over which you can invest with your money,” says financial planner Dick Kruijt. He has his own consultancy company and is secretary of professional association of independent financial planners VOFP. “You can get about 3 -4% in return, on average.” If you can afford the risk of a fluctuating benefit, it‘s a good idea to consider investing after your pension, says Kruijt.
At that point, around your seventh year of life, you probably have no other income besides your AOW pension, and there is little possibility to get back to work. Financial planner Hanneke Wolff-Rierink of Fiorino Financial Planning: “If you prefer security as a human being, you shouldn’t do it. But if you think, I have enough and I want a chance of an extra return, you can choose it.”