You work hard to build a retirement fund. The only task left for living a comfortable life after retirement is to get regular income out of this. A safe way of doing that is to buy annuity plans, which invest your money in markets and pay you regularly from the returns generated. Many life insurance companies offer these plans. Investors in the National Pension System (NPS) and superannuation funds have to mandatorily buy annuity. Annuity plans come in different forms.
Deferred or Immediate: There are two basic plans – deferred and immediate. In deferred annuity, you deposit a lump sum and wait for it to grow; you can also regularly save over a period, after which regular income starts. In immediate annuity, payments start immediately. “Immediate products are for the 60 years old segment, while deferred products are suitable for customers in the age bracket of 50-60 years,” says Puneet Nanda, Deputy Managing Director, ICICI Prudential Life Insurance.
Guaranteed income for life: The best thing about annuity plans is certainty of regular income. The rate set at the time of purchase does not change during the payment period.
“One of the biggest advantages of annuities is that they eliminate reinvestment risk. In fixed rate annuities, the risk that the interest rate will be lower when one reinvests the principal is eradicated. Products such as fixed deposits or debt mutual funds or post office monthly income scheme carry reinvestment risk. Annuities guarantee the same payout rate for life,” says Tarun Birani, Founder and CEO, TBNG Capital Advisors.
This story is from the March 08, 2020 edition of Business Today.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the March 08, 2020 edition of Business Today.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
It's Personal
Mixing work and personal tasks on work machines may be a done thing for many, but it makes sense to have a dedicated device for your personal needs. Here are two such devices
INTO THE BLUE
For WTiCabs Founder and CEO Ashok Vashist, scuba diving is not just an adventure sport. It is a pathway to connect with the ocean
"Challenges are opportunities"
AMIT JAIN CO-FOUNDER & CEO CARDEKHO GROUP CarDekho Group is a digital automotive solutions provider
THE WAIT FOR HIGHER PENSION
ALMOST 18 MONTHS AFTER THE SUPREME COURT RULING, SUBSCRIBERS WHO OPTED FOR A HIGHER PENSION UNDER THE EMPLOYEES' PENSION SCHEME CONTINUE TO WAIT AS THE EPFO, FACING A STAFF CRUNCH, TRIES TO FIGURE OUT THE MATH
"It's possible to have a 25% growth out of India from now on"
Rail Europe Executive Chairman & CEO Björn Bender talks about the India market, the shift to digital, and the way ahead
Evolving Strategies
Companies need to adapt to changing times for a strong workforce
PERKS PRESSURE
IT'S NOT JUST ABOUT THE MONEY ANYMORE FOR EMPLOYEES. FROM FOUR-DAY WORK WEEKS, TO SKILLING ON THE JOB AND MENTAL WELL-BEING EXERCISES, COMPANIES ARE OFFERING A HOST OF BENEFITS TO RETAIN TOP TALENT. IS THIS ENOUGH?
Turning Over a New Leaf
The integration of mortgage giant HDFC Ltd with HDFC Bank sets the stage for making the best of both worlds
THE FLEXIBILITY TO EXCEL
By offering employees multiple ways by which they can work and grow, Google has ensured that it gets the best from them
All About 'Learning & Training'
L&T provides its employees with a variety of programmes to help them grow professionally and climb the corporate ladder