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The post-retirement phase often finds us with abundant free time. Prior to retirement, we have regular income but finding time is a luxury. Retirement phase gives us an opportunity to pursue the activities that we may not have been able to give time to during our working years. However, for many retirees, money often becomes a constraint. The comfort of a regular monthly income – the ‘salary’ – is missed.

The challenge is twofold. One is the lack of a steady income and the other one is that of liquidity. Often, after retirement, we have the money in the form of a large lump sum. If not spent wisely, the lump sum may fade away soon, leaving us financially dependent on our children or other family members. Hence, it is necessary to invest in options that offer stability as well as provide liquidity. The other challenge in many cases is the tendency to delay retirement planning. Starting late could lead to building an inadequate retirement corpus.

There are various financial planning instruments available for retirement planning. A popular choice is annuity. There are different types of annuity plans offered by life insurance companies. An annuity plan invests retirement corpus with an insurance company, to provide for regular cash flow for the rest of our retired lives.

There are different types of annuity plansImmediate as well as Deferred annuity. In Immediate annuity, we start receiving a monthly income as early as just one month after investing the lumpsum. Deferred annuity plans give us the options to choose the age at which we want to start receiving the payouts.

The biggest benefit of an annuity is that it offers a healthy mix of stability and liquidity, with an income option for the rest of our lives. An annuity product also helps in locking in an interest rate today for the rest of life. Since deposit rates have been on a downward curve, ensuring a guaranteed interest rate for life gives added peace of mind. With the much-needed stability of a guaranteed income and liquidity (regular income), we get the feeling that the ‘salary’ continues.

We, at HDFC Life, conducted research to understand customer motivations for purchasing annuity. We also spoke with people who had purchased annuity plans post-retirement. The research indicated that customers largely concur with the idea that an annuity plan offers them the guarantee of a regular income for life, and thus plays a critical role in helping them maintain their lifestyle. This thought was the key to our campaign ‘My first salary after retirement’ in which we spoke with individuals who have benefitted through annuity plans.

Snippets from HDFC Life’s campaign ‘My first salary after retirement’

I love travelling and when I was working it was easier to manage. As retirement approached, I had doubts if things would continue to be the same. But thanks to my decision of investing in an annuity plan, I continue to have a regular monthly income just like before,” said Alok Nandan, Retired Executive Director, ONGC.I am now planning a vacation with my wife next month, and we are very excited about it!”, he added.

HDFC Life Annuity

My first salary after retirement due to annuity

Sudha Jain, who retired as a Government School Teacher, said “The biggest benefit of investing in an Annuity Plan is getting a regular monthly income which helps in managing the daily expenses. I can now pursue my passion for music.”

HDFC Life Annuity Plans

Following passion after retirement due to Annuity Plans

Investing in an Annuity plan was definitely one of my best decisions. Now, I have a regular monthly income, that helps me live life king-size even after retirement.” said Sunil Gokhale, who retired as GM-HR, Bajaj Auto Finance.

My first salary after retirement due to annuity

My first salary after retirement due to annuity

We believe every individual deserves to live life to the fullest even after retirement and a regular income enables them to do just that. That’s where Annuity Plans can play a critical role in the lives of people on the verge of retirement.

Pankaj Gupta Senior Vice President, Chief Marketing Office HDFC Life

Pankaj Gupta of HDFC Life

 

 

 

The Author of the article is Pankaj Gupta, Sr. EVP Sales & CMO, HDFC Life

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