Deferred annuity plans: Ensure retirement income with guaranteed return

Inflation will reduce value of payout, so invest part of retirement corpus in growth instruments

Grant Thornton’s recent report titled ‘India’s pension landscape: A study on retirement reality and readiness’ highlights low engagement with annuity plans. It says 76 per cent of respondents had not invested in these plans, despite the role they can play in providing stable post-retirement income.

 

How do they work?

 

In a deferred annuity plan, the customer pays premiums, either once or over several years. This money is invested and grows over time. “Once a person retires, the corpus turns into a source of income as the person receives payouts. A deferred annuity plan allows a person to get a steady