When comparing Programmed Withdrawal (PWD) and annuity in Nigeria, there are several benefits of programmed withdrawal that you should consider:
1. Flexibility: Programmed withdrawal offers greater flexibility compared to annuity. With programmed withdrawal, you have control over how much and when you withdraw funds from your retirement savings. This flexibility allows you to adapt your withdrawals based on your specific financial needs and goals.
2. Investment Control: With programmed withdrawal, you maintain control over the investments of your retirement savings. This means you can choose how your funds are invested, potentially enabling you to optimize returns based on your risk appetite and market conditions. In contrast, annuities are typically managed by insurance companies, limiting your investment control.
3. Potential for Higher Returns: Programmed withdrawal offers the possibility of higher investment returns, potentially leading to greater financial growth over time. By actively managing your investments, you can seize opportunities in the market and adjust your strategies as needed.
4. Inheritance Planning: Programmed withdrawal allows you to plan for the transfer of your remaining retirement savings to your chosen beneficiaries upon your passing. This means you can pass on any unused funds to your loved ones, providing them with financial security after your death. Annuities generally do not offer the same level of inheritance planning flexibility.
5. Cost Control: Programmed withdrawal may have lower costs compared to annuity schemes. Annuities often involve administrative fees, commissions, and other charges that can reduce the overall value of your retirement savings. With programmed withdrawal, you have more control over the associated costs and can minimize expenses.
However, it’s important to note that there are also potential downsides to programmed withdrawal. The responsibility for managing investments and ensuring sustainable withdrawals falls on the retiree, which can be challenging without proper financial expertise. Additionally, investment performance and market volatility can impact the success of programmed withdrawal.
Before making a decision, it is crucial to consult with a qualified financial advisor who can assess your individual circumstances and help you make an informed choice based on your specific goals and needs.