Dear viewers Today we discuss an another issue for those who want a regular income in the form of annuity by making investment. As we are seeing lots of ups and down in the market, nowhere there is boom and the deposit rates in banks are at record low due to RBIs monetary policy basically the impact of repo rate. Now the question is where to invest to get a secured income monthly at a smart rate. Deffered for youngers and immediate for olders- I am talking about annuity( pension), whether this concept is right or wrong. Deferred Annuity is nothing but just to keep money with the annuity provider for a time period and after the certain period you will get a fixed income as defined/contracted. However, if i explain it- it is as lower in comparision to immediate annuity is. How? Let see an example of Mr.x aged 40, who have 40 lakhs of rupees in hand chooses deffered annuity @ 22 percent for life from 60 yrs of age comes to rupees 8,80,000 yearly/ 12= Rupees 73,300 approx mly. On being purchaging of National savings certificate of Rupees 40 lakhs from Post office at 7 percent interest per annum (as indian economy is growing we can assume that interest will not come down below 7 percent in another 20 yrs) Mr X's capital grows to rupees 1, 61,54, 955 approx and on investing the amiunt at the age of 60 for immediate annuity option with lesser amount of interest i.e. say 6 percent Mr x will get 9,69,297 yearly/12= 80,774 mly. In addition to above one can take loan on the deposits invested during those 20 yrs for any uncertainties (addon benefit). The picture is clear-- if you can analyse that the scenario of Indian economy may grow and India will become a developed country than interest on deposit will come down and if one thought that India will remain a developing country in another 20 years that in no way deposit interest rate comes below 6 percent. The second option will grow you more Guys. Its your money play safe and make more (use the power of compounding).
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