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Annuity

Do you have enough savings for your retirement? Get to know what an annuity is and how to invest in an immediate annuity plan to build your retirement corpus.<br>

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Annuity

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  1. Annuity

  2. What is an annuity? • An annuity is a contract in which an insurer pays you a set sum on a regular basis over an extended period of time, typically a lifetime. This payment is in place of one you would have made in one lump sum. Annuities are designed to deliver a consistent income stream after retirement. It is a strategy for protecting your retirement years from financial risk, ensuring that your savings won't be jeopardized and that you won't have to take on debt to maintain your standard of living • The annuity plan does not specify a specific retirement age; you can choose to opt for an annuity plan and begin receiving benefits as early as 40 or 45. The plan guarantees you an annuity for the rest of your life, and by choosing a joint-life annuity option, you can also make sure your spouse is protected. The primary advantage of an annuity is locking in rates for a lifetime even if interest rates are always changing. As a result, you can retire stress-free knowing that the annuity plan will take care of your basic necessities.

  3. How different types of annuities work • Lifetime Income: As long as you remain alive, this sort of annuity offers you consistent payouts (annually, quarterly, or monthly). When you die, the payouts stop. • Lifetime Income with Capital Refund: You receive the payouts in this case as long as you live, too. The insurer pays your nominee the initial investment sum after your passing. This is the sum you forked over to buy the annuity plan. Similar to life insurance, this enables you to leave something for your loved ones. • Lifetime Income with Annual Increase: This kind of annuity raises the payable amount by a certain percentage, such as 2% or 4%, to adjust for inflation. Even though it might not accurately represent national inflation rates, it helps you deal with potential expense increases. • Lifetime Income with Certain Period: This means that the payouts will be made to you over a set length of time, such as 5, 10, 15, or 20 years. When the guaranteed period is up or the annuitant passes away, payouts will stop.

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