Why Choose Annuities After Retirement?

Annuities are the schemes that have been introduced to make the retirees independent. Once the senior citizens retire, they start feeling very depressed and helpless. To ensure safety to them, the annuity schemes have been introduced.It is defined as a contract between an individual and an insurance company. There are several types of annuities that are available for the retirees, which they can choose from, based on their suitability. With annuities, convenient lifestyle of the senior citizens is assured. Whichever type of scheme you may choose for your retirement, the lenderswill free you to select whether you desire to receive the income for life or limit it to certain period.

The two most common types of annuities are immediate and deferred annuity. In case of the immediate annuity, the retirees start receiving the income as soon as they pay the initial sum that is actually the premium. Those who are in urgent need of finance can easily avail the facilities offered by these schemes. On the other hand, in case of the deferred annuity scheme, the individuals can postpone their earning to extended period. The best thing about this plan is that the retirees are not supposed to pay any tax on the annuity amount until they start withdrawing the sum.

Whether a person chooses an immediate annuity or goesfor deferred annuities, he will have to select from the sub-division, i.e., the fixed or variable form of annuity. In case of the fixed immediate ordeferred annuity, the amount to be received never changes. It is fixed throughout the scheme tenure. While, in case of the variable annuities, the retirees may get increased income and sometime may receive less than the previous sum. Thus, it is expected that the retirees make a suitable decision to ensure better tomorrow for themselves.