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Are you set to retire in five years? If so, this news is for you. The question isn't just about how much money you have, but rather how much monthly income that money will generate for the rest of your life. Even with investments like FDs, mutual funds, PF, and other savings, rising inflation and medical expenses can pose significant risks post-retirement.

As retirement approaches, many people grapple with similar questions: Is my current savings enough? If I live for another 25–30 years after retiring, how long will the money last? How will I manage the escalating costs of medical treatment and medication? And perhaps the biggest question of all: Will I have to depend on my children financially in my old age? Ashok Manwani, Vice President (Products) at Go Digit Life Insurance, explains the situation.

**Inflation directly impacts your savings**
He points out that increasing life expectancy has made these questions even more critical. Living for 25 to 30 years after retirement is becoming common today. Consequently, parking money solely in traditional savings instruments may not always suffice. Over time, inflation erodes the real value of your savings, while healthcare costs can rise sharply.

**Building a corpus isn't enough**
A common mistake in retirement planning is focusing exclusively on accumulating a large corpus. The real challenge lies in converting that corpus into a steady stream of income that lasts a lifetime. This is where annuity plans can prove useful.

These are retirement income solutions typically offered by life insurance companies. They involve depositing money either as a lump sum or in installments at fixed intervals. Depending on the chosen plan, the income payout can begin immediately or at a future date.

You can think of this as a form of private pension; its objective is to provide a regular and predictable income after retirement.

**Which annuity plan is best for you?** Immediate Annuity: ** For those who require income immediately after retirement; regular payouts can begin quickly with this option.

Deferred Annuity: For those who wish to start receiving income after a few years; this allows for planning of future retirement income.

Guaranteed Annuity: A useful option for those seeking a fixed income and wanting to know the payout amount in advance.

Variable Annuity: This offers guaranteed income combined with the potential for market-linked growth; however, the income amount may fluctuate.

Income Provision for Both Spouses
Some modern annuity plans offer a 'joint life' feature, covering two individuals—typically a husband and wife. Depending on the terms, income payments can continue for the surviving spouse following the death of the other. Certain plans also include a 'Return of Purchase Price' option.

This provision allows for the refund of the invested principal amount under specific circumstances. It can offer additional financial security in situations such as critical illness or provide protection for dependents, though the specific terms and conditions vary by plan.

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.