Worries about security, health and comfort become greater in your Golden years. With rising prices, increasing health care expenses and high life expectancy planning for your post-retirement phase in life has become important.
Hence, it is important to invest in something that not only helps you plan for retirement, but also continues to pay you an income throughout your retired life. FDs, MFs and other investment takes care of your future goals but these investments will not give you regular income with which you can manage your day to day activities. One such plan that can help you plan for your retirement and provide you an income is an immediate annuity plan.
It converts your savings or lump sum amount into a guaranteed lifetime income source post-retirement, which you can avail anytime as per your choice.
Annuities are a great option for people who want to receive a steady income and stay financial independent even after retirement.
In annuities, you can choose your payout option: receive payments for the rest of your life, or for a set number of years.
Let’s look at the different types of annuities
There are two basic types of annuities: deferred and immediate.
With a deferred annuity, your money is invested for a period of time until you are ready for withdrawals.
In an immediate annuity you begin to receive payments soon after you make your initial investment. So you can consider opting for an immediate annuity even when you approach retirement age.
Annuities can also be either fixed or variable depending on whether you opt for the pay out option which is a fixed or variable i.e. it will be tied to the performance of the overall market.
The money that you invest in an annuity is tax-deferred. When you get withdrawals, the amount you contributed is not taxed, but your income is taxed at your regular income tax rate.
The biggest advantage annuities offer is that they allow you to invest a larger amount of cash and defer taxes. So you can put away more money for a happy retirement. All the money you invest compounds year after year. You can choose opt for your returns by choosing to take a lump-sum payout from your annuity or you can set up guaranteed payments for a specific duration of time or the rest of your life so that you have a steady income post retirement.
One such annuity plan that will help you enjoy your golden years of retirement is Edelweiss Tokio Life – Immediate Annuity Plan it is a traditional non-participating non-linked annuity plan that helps you plan your retirement with guaranteed annuity benefit. You get to choose from multiple options as per your requirements. You can pay only once and avail immediate annuity benefits for lifetime. It also provides an option of annuity benefits for both – you and your spouse and an option to receive annuity benefits in yearly, half-yearly, quarterly or monthly instalments. There are various annuity options you can choose from like Return of Purchase Price where there is both survival and death benefit – you get a life time annuity payout at a constant rate and after the death of the policy holder the purchase price will be payable to the nominee. Life Annuity Increasing at a simple rate of 3% p.a. or 5 p.a. . Joint life annuity plans are also available like;
Joint Life, Last Survivor:
- If Primary and Secondary Annuitant, both are alive: 100% of annuity payoutis provided at a constant rate
- Primary Annuitant is alive and Secondary Annuitant is dead: 100% of annuity payout is provided at a constant rate
- Primary Annuitant is dead and Secondary Annuitant is alive: 100% of annuity payout is provided at a constant rate
- Primary Annuitant and Secondary Annuitant are dead: Nil
Joint Life, Last Survivor with 50% annuity
- Primary and Secondary Annuitant, both are alive: 100% of annuity payout at a constant rate
- Primary Annuitant is alive and Secondary Annuitant is dead: 100% of annuity payout at a constant rate
- Primary Annuitant is dead and Secondary Annuitant is alive: 50% of annuity payout at a constant rate
- Primary Annuitant and Secondary Annuitant are dead: Nil 11.
Joint Life, Last Survivor with Return of Purchase Price on Last Death:
a. Survival Benefit: 100% of annuity payout at a constant rate till the lifetime of the last survivor
b. Death Benefit: Purchase price will be payable to the nominee/legal heir on the death of last survivor.
There is also additional benefit for higher purchase price. With so many advantages an immediate annuity plan is a good solution for financial independence post retirement and the options and benefits provided by Edelweiss Tokio Life – Immediate Annuity Plan makes it sound lucrative and can be shortlisted when you consider opting for an annuity plan.