1 in 10 delays retirement in 2012

Are you close to retirement? Can you actually afford to give up work? Many increasingly can't retire due to rock-bottom annuity rates and disappointing stock market returns, according to a new survey.

Of those deferring retirement, a massive 68% claim they simply now can't afford to retire as originally planned.


Unpalatable

"People are living longer, and for many, the very real prospect of a thirty year retirement is either unpalatable or unaffordable, hence the decision by many to continue to work," says Prudential's retirement income expert Vince Smith-Hughes. "Retirement is also becoming a more opaque concept, with many people working part-time, either out of necessity or desire."
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A huge issue is miserably low annuity rates, made worse by the higher cost of living. Richard Clarke from Cheshire-based Chartwell Financial Services told AOL Money that there is another option for those on the cusp of retirement to consider.

It's called a fixed-term annuity. "In essence, you buy a fixed-term annuity, from five to 20 years. If you buy a conventional annuity, you can't change it. But a fixed-term annuity gives you some breathing space."

Third way?

That breathing space could be important as Clarke predicts that annuity rates could lift by as much as 20% in the next 18 months to two years (though they could, he also points out, drift lower again).

Of course, if you can afford to delay taking an annuity, it also means that that when you do claim, you will be older, lifting the value of a later annuity further.

Meanwhile the Prudential's survey also shows that giving up work well before your mid sixties is still an aspiration for many. "The average age of people planning to retire this year is 60 years old - a similar age to last year's survey and seven months younger than in 2010," claimed the Pru.
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