In my opinion, planning your finances is crucial at every stage of life. However, retirement preparation is essential to maintain your social standing and financial security in your old life. Such a retirement strategy to safeguard your money is a deferred annuity. So you must know what is a deferred annuity pension.
Opt for NoBroker buyer plans if you want to save money on property investments. Consult a professional at NoBroker to get answers to all your legal queries.What is a deferred annuity policy?
It is a particular kind of retirement plan. In this plan, the insured person enters into an agreement with the insurance company. It is the agreement to pay the firm a number of lump sum payments in order to create a retirement corpus. This corpus would be used to pay the annuitant an annually or monthly pension upon maturing. This is how you must define deferred annuity.
How do delayed annuities function?
Taxation on the accumulating sum is postponed until it is withdrawn.
Under section 80CCC, the fee charged to create the deferred annuity corpus is exempt from tax up to INR 1.5 lakhs annually.
Taxes are only due by persons when they withdraw money or begin receiving income.
The investor makes payments on the annuity during the accumulation phase.
The annuity exists from the maturity date.
The annuitant has the choice to take a tax-free withdrawal of one-third of the corpus at the moment of maturing under section 10 (10A).
The remainder should be used to buy an annuity using one of the possible options.
The money is returned to the investor as a pension during the release period. In the annuitant's ownership, this is taxable.
The income is designed such that both the investor and their spouse can get income in accordance with the annuity choice selected.
Should you make a deferred annuity investment?
If you don't need money right away or have any obligation to pay off, a deferred annuity can be a wise decision. It's essential to understand your financial requirements up until the payouts are accessible. Because, unlike with a deferred annuity, you just receive the funds following the deferment time. If you and your spouse want a steady income for the rest of your lives, a deferred annuity is a fantastic choice.
Now you know what is a deferred annuity.
Read More: What is a deferred tax asset? What is deferred tax liability? What is superannuation in India? Can you withdraw your pension contribution before retirement?Your Feedback Matters! How was this Answer?
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What is a deferred annuity?
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2022-08-16T20:46:56+00:00 2022-08-16T20:46:58+00:00Comment
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