Income drawdown has become an option for many retirees and this has made it become the ultimate substitute for annuities. This is a retirement benefits scheme that is premised on providing solutions to retired individuals who have a large pool of retirement and have the will to handle higher risks. There is a noticeable difference between this scheme and annuities simply because here the invested funds do not guarantee fixed income. The funds are instead reinvested in different portfolios for the generation of a varied income.

This means that the annual income is different form year to year although it remains within the limit set by the scheme. The concept allows for a minimum percentage of zero and with the maximum going up to a hundred and twenty. It is important though to keep in mind that these rates might differ between men and women.

Investors can benefit from the scheme until when they attain the age of seventy five years whereby the fund is translated into a secured pension. An investor can also decide to have a traditional annuity while will allow them to get income on the termination of the fund. One great advantage of the scheme is that investors can take advantages of various investment opportunities for the diversification of their funds.

Retirees who opt for this scheme have numerous investment options such as the ability to invest in annuities once they have attained favorable levels where one will find good return on investment. The funds can also be directed towards purchasing the most preferable annuity schemes.

Investors can also buy annuities form the initial investment once it has attained substantial levels of growth. This scheme differs of a huge scale from other retirement funding where the beneficiary is not given the entire income form the investment but this is a scheme where the nominees receives the residual in full without strings attached.

The nominee or dependant can then decide on the most effective way of receiving the income such as being given the whole amount with a certain percentage of deductions on tax. The other choice is for withdrawing the money on a monthly basis. The investor can also decide to buy the annuity schemes where one will be getting regular income.

The generated income can differ but the key thing is to ensure that it stays inside the limit. The withdrawal can be made through the use of a special calculator that helps in determining the amount to be received by the investor. There is a choice for the desired for withdrawal and here one can choose to make the withdrawals monthly, annually or even quarterly either as arrears or as an advance depending on the need of the hour.

These facts about income drawdown are not fixed but are subject to change and depend on terms set by the provider. Investors are therefore required to take time and have a through scrutiny of this so as to be well acquainted with them. This can also be done with the help of a financial advisor who is able to tell about the pros and cons of every option so as to be able to make an informed decision.