Financial planning essentially covers your retirement to help maintain a comfortable independent lifestyle after you have ended an active working life. After retirement, a steady guaranteed income stream is the primary objective of retirement planning for those who do not benefit from a post-retirement pension, like government employees. Retirement planning can transform your retired life into a golden period free from concerns about your healthcare needs and an uncompromising lifestyle.Read more
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Additionally, a suitable plan in India can propel you ahead of inflationary trends to a peaceful existence. You have to create a corpus in the long term during your productive years so that a similar income stream substitutes your steady in the form of an immediate annuity plan.
The annuity plan is defined as a scheme that provides you with a regular payment for life against a lump-sum amount invested with the service provider. In India, the simplest annuity is the insurer’s retirement/pension plan, which helps build the required corpus to invest and pay you back through the returns. In a nutshell, an annuity is a contract between the insurer and the policyholder, wherein the latter makes either a lump-sum payment or installments. A regular income stream commences immediately after paying the lump-sum amount, as in immediate annuity plan, or at a mutually agreed upon specific prospective date, usually after retirement. Before delving deeper into the immediate annuity plan details, let us find the different types of annuities available in India.
Now that there is clarity on the annuity plans in general and the immediate Annuity Plan, let us find out how you will benefit from the selected plan.
The immediate annuity plan is the most basic form of annuity in the Indian market, yet it is laced with a host of features to benefit you. Some of the key ones are:
You must essentially survey the market for the various immediate annuity plans on offer to make an informed choice that best suits your needs. It is also sensible to look for additional features and benefits like inflation protection. You must also consider the following essential points before you commit to a particular plan:
The decision to choose the right time is best handled on circumstances as they vary from person to person. The critical question you must answer is when do you intend to retire? Building the corpus is a long-drawn affair, and as the saying goes – it pays to start early. Your corpus health will determine the type of lifestyle you have gifted yourself for your golden years. Dedicated retirement planning is crucial to cover your financial needs after your active working life ends. You and your spouse can lead a peaceful, independent life backed by the steady income stream you have ensured through your immediate annuity plan.
The two popular Indian annuities are distinguished from each other by the annuity payouts commencement. As already seen, you start receiving annuity payouts in a steady stream in the immediate annuity plan as soon as you purchase. On the other hand, your deferred annuity plan commences the income stream at a mutually decided future date. The crucial element that clinches the issue in favour of one or the other is your age. If you are close to your retirement or just retired, an immediate annuity plan is tailor-made for you. Contrarily, if you are young, you may prefer to choose the deferred annuity plan.
The second innings of your life post-retirement is an important milestone. You can enjoy the fruits of your toil during your working life if you have planned well in advance to lead your retired life the way you want. Your life quality in your twilight year’s pursuit in hobbies, a business, or spend serene leisure amid your loved ones is supported by a regular income stream. Your immediate annuity plan can be the gift that will ensure your independent financial existence in your desired lifestyle.
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