Pros and cons of life annuities and scheduled retirement

[Himon2413]

If you are about to turn 65 and are losing sleep over your ideal pension, this guide will help you make a better decision.

The Life Annuity and the Programmed Retirement are the most contracted modalities in the private system. In the first case, the worker hands over his fund to an insurance company so that it can give him a monthly remuneration for life, in soles or dollars.
In the second case, the money accumulated by the member in his Individual Capitalization Account (CIC) continues to be managed by the AFP and the pension is only delivered in soles.
PROS AND CONS José Bazo, technical manager of Protecta , assures that life annuities protect retirees from the volatility of the financial system and a complete list of unit number screening guarantee them an unchanging pension.
Companies assume the financial and survival risks, meaning that people live longer than expected, he explains.
Additionally, they pay an annual interest rate that varies according to the currency contracted. According to Interseguro , it is 4.9% in soles and 4.2% in dollars.
Meanwhile, César Chang, Operations Manager of AFP Integra , explains that scheduled withdrawals are managed under the same criteria as Fund 1 of the AFP, so in good years you can earn more than 10%.
In this way, the money accumulated for retirement continues to compound while the pension is being received. And if the retiree has a tolerance for risk, he can ask that his savings be transferred to Fund 2, which has had a gain of 20.31% in the last two years, Chang says.
However, there are also cases of losses of up to 15%, the executive clarifies. Therefore, unlike the life annuity, which is irrevocable, this modality allows the pensioner to change to another option at any time.