Principal Advantages Of Pension Annuity Schemes

Defining Annuity in the most simpler terms

Annuities can be defined as agreements that yield some specified rate of return. In terms of most financial planning jargons pension annuity policies with various schemes propose many advantages to the individuals. And among many benefits the most worth mentioning benefit of these pension annuity schemes are that they guarantee noteworthy tax benefits. Thus these tax deferred pension schemes significantly reduce the liabilities on the pension account holder. One of the best pension annuity scheme that provides you the most optimal retirement is a fixed annuity pension scheme. This article will give you few insights to look into the reasons why annuity policies are mostly recommended to individuals by expert financial planners. Principal advantages of pension annuity schemes are as follows:

Tax advantages that lower the number of times you need to pay up income taxes

If you opt for a pension annuity scheme, you will enjoy highly beneficial tax advantages as your total tax amount decreases in value and remains low since tax payments are required only after the principal fund of your annuity policy is processed. Hence, the annuity investment consequently lowers the number of times you need to pay up your income taxes.

More financial benefits from accumulated interest incomes

Financial gain is an additional advantage that is offered with your pension annuity policy. You might be thinking what kind of financial gain I am talking about? Its related to the interest rates! Rate of return coming as steady flow of income, calculated at compound interest rates, is offered to the policy holders. This rate of return can be earned from previously accumulated interest incomes, the total amount of the invested fund as well as from the potential fiscal liabilities that you might be having.

Various options to withdraw funds from your pension annuity scheme

There are several ways by which you can easily withdraw money from your pension or retirement annuity scheme, adding much to the expediency of the latter. Some of which are listed as under:

Monthly Basis Withdrawal Option: You can earn an interest income on a monthly basis from your fund,

Yearly Basis Withdrawal Option: Provides you an option to withdraw a fixed percentage (usually 10%) of your funds, on a yearly basis

Used Defined Income Option: Your annuity funds can also be converted into a continuous flow of earnings. The time period of the income-flows can also be specified by the policy holder for the time the policy holder wants it to be available.

Undoubtedly, these pension annuity schemes are of extremely financial advantage to the policy holders. Such pension funds multiply over time and can accesses as and when required.

by: Tony

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