By: Mike Anderson
Submitted: 2011-09-21 06:39:39 | Word Count: 537
Planning for retirement is really important because post-retirement people have to suffer financial problems if due to lack of proper planning. Actually, after retirement the income reduces and the pension received by the people is not sufficient to meet the expenses. Therefore, it is really important to plan finance before retirement. There are deferred annuity and Income annuity plans which may provide you a regular income.
Investment in deferred annuity is mainly done to make post-retirement life easy by providing them guaranteed returns after retirement. You can calculate the returns on investment with the help of an annuity calculator and then decide the amount of money you want to invest in deferred annuity. Then you will have to deposit the amount of money with the annuity provider. You can either deposit the money either in lump sum or in installments for a certain period of time, according to your convenience. This specified period of time is known as deferred time and so is the name of the annuity i.e. deferred annuity. However, before taking any decision it is really important to estimate the returns on investment using an annuity calculator as mentioned above by entering your details in it. The calculator will show results immediately.
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In deferred annuity the premiums paid by the investor on monthly, quarterly or half yearly basis becomes refundable. If the holder of deferred annuity dies; his or her family members can surrender the annuity, if they want to. In such cases the amount of money that is to be refunded is calculated by the annuity calculator. The most important advantage of deferred annuity is that the taxes also get deferred till you do not withdraw the money. When you withdraw the money, it may become taxable depending on the amount of money.
Almost every individual looks for financial stability after retirement because this is the factor that will determine how the life of the individual would be post-retirement. In such situations income annuity can be really beneficial as it ensures a regular income after retirement. Income annuity can be defined as an insurance contract offered by the insurance companies to provide an additional income to the retired people irrespective of the amount of pension received by him or her.
In income annuity an individual is required to pay a sum of money as premium to the insurance company which gets converted into payouts for helping the individual to meet the future financial requirements. The payment can be made to the income annuity holder either in lump sum or in regular installments on monthly, quarterly or semi annually basis. This a great advantage of taking Income annuity as they can select how they would like to receive payments.
Another important advantage enjoyed by the holder of income annuity is that the annuitant has the liberty to decide whether he or she wants to continue the payments to his or her spouse after death.
Thus, deferred annuity as well as income annuity is very beneficial as they ensure additional income to the investor after he has retired.
