padraig mac
Registered User
- Messages
- 13
I’m wondering whether choosing the escalation option with an annuity-based pension payout is good (or bad value).
For example in a given scenario, choosing a 3% escalation option with a €100,000 annuity would result in an annual pension which would be about €2,000 lower that if a 0% escalation were chosen.
It’s obvious from this that in the case of the pension with the escalation option it would take many years for the annual pension payout to reach the level of the initial payout of the pension with no escalation option.
It seems to be a very expensive way to provide some level of protection against inflation.
Any views would be welcome.
For example in a given scenario, choosing a 3% escalation option with a €100,000 annuity would result in an annual pension which would be about €2,000 lower that if a 0% escalation were chosen.
It’s obvious from this that in the case of the pension with the escalation option it would take many years for the annual pension payout to reach the level of the initial payout of the pension with no escalation option.
It seems to be a very expensive way to provide some level of protection against inflation.
Any views would be welcome.