Not financially savvy? Tackle reinvestment risk with deferred annuity plans

Invest only a part of your retirement corpus in them or else you will not be able to benefit from any rate increase

personal finance, investments, investors, funds, markets, stocks, savings

Sanjay Kumar Singh New Delhi
Returns on fixed deposits (FDs) have declined in the recent past. Many investors are fearful they may fall further and are hunting for instruments that will allow them to lock into current rates. One product they are turning to is deferred annuity plans from life insurance companies.

An investor who is, say, 50 years old, can put in a lump sum in a deferred annuity plan and allow his money to compound for 10 years. Once he retires at 60, the payouts begin. The option to pay a regular premium during the accumulation phase also exists.

Lock into current rates

First Published: Nov 10 2021 | 4:13 PM IST

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