An Overview Of Retirement Annuity And Life Annuity

By Author: Robert Cook
Total Articles: 111
Comment this article

Retirement is a turning point in one’s life after which most of the people have to face financial crisis because the pension that is received is not sufficient to meet their daily expenses. At this age there is more need for funds because people develop many kinds of diseases for treating which large sums of money are required. Therefore, it is essential to plan and invest in some financial instrument early. But investing in any kind of investment it is important to find out whether it is safe or not because at this age there is no point in taking risk. The best instrument for investing is Retirement Annuity. With Retirement Annuity one can lead a tension free life because it is safe and provides a constant flow of funds post retirement.

In Retirement Annuity you will have to invest a certain amount of money for the specified period of time initially. After the annuity matures the investor will receive the amount invested by him along with returns on the basis of the income earned on the investment. The returns of Retirement Annuity can be received either in lump sum or regular monthly repayments. An important ...
... advantage of Retirement Annuity is that the tax shall be applicable only when the amount is withdrawn. This helps in more amounts to accumulate.

Life Annuity is a type of annuity that also provides a regular income to the people after retirement. The major benefit of Life Annuity is assurance of long time insurance. In this type of annuity the payments made by the company is for an indefinite period of time until the death of the annuitant. The investors are allowed to include their spouse or others in the policy to receive maximum number of payments. Life Annuity is a safe annuity and people can invest in it for smooth running of the retired life.

In Life Annuity there are two phases: the accumulation phase and distribution phase. In the accumulation phase of the annuity the annuitant has to make payments to his account. He can either pay in lump sum or regular instalments. In the distribution phase of Life Annuity the insurance company distributes the accumulated earnings to the annuitant as a regular income until his death.

Thus, Retirement Annuity and Life Annuity are beneficial to the retired people as they provide an extra income so that they can lead a life free from financial worries.