An introduction to Retirement Plans
Retirement plans are kind of financial plans designed for the retired persons so that they can live in financial comfort during their sunset years.
different types of retirement plans
Pension plans allow individuals to start saving a sum periodically so that it can grow into a lump sum amount and support the investor after his retirement. Pension plans are designed keeping in mind inflation, ensuring that you don’t have to adjust your standard of living as there will always be a steady flow of income to support your expenses even when you are not working.
Annuity plans guarantee that you receive full income payments as long as you live. In this scheme, money is accumulated in the same way as in the pension plan. Once you retire, you can use the accumulated sum to buy the annuity plan. This plan guarantees that you continue to receive a certain amount every month as long as you are alive, depending on the terms and conditions included.
There are two types of annuity plans:
Immediate Annuity: It ensures that you receive monthly payment after you buy the plan.
Delayed Annuity: This scheme allows you to accumulate the sum over many years. After you reach a certain age, you will start getting the payouts.
