As annuity rates are falling, delaying decisions about retirement can mean missing out on potential income. It can take years to recoup the income lost over the intervening period if your fund value remains flat. For example, a 65 year old man can buy a yearly income of £2,856 with a pension fund of £50,000, but a 67 year old man in the same situation could obtain a better annual income of £3,036. If the younger man delays buying an annuity for two years in an attempt to gain a higher income, with all the factors remaining unchanged, he will have given up a total of £5,712 (£2,856 for each years delay) in order to boost his annual income by £180 (The difference between the 65 and 67 year old). At that rate it will take him 32 years to recoup the income by deferring his income for two years.
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