If you wish for the retirement of your dreams, it is essential to make the right arrangements for it. Whether you start your retirement planning late or early, full-proof retirement planning depends on the financial instruments you add to your portfolio. Choosing the right one can make all the difference.
SBI Life – Smart Annuity Plus is an individual, non-linked, non-participating, general annuity product that offers immediate as well as deferred annuity options. Immediate annuity options can provide for a second income or can be used for maintaining a regular income post-retirement. Deferred annuity options, available with deferment period of 1 to 10 years empower you to choose when to retire, according to SBI Life’s website.
SBI Life – Smart Annuity Plus is suitable for anyone in want or need of regular income arrangement to help boost their retirement plan and financial independence.
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SBI Life – Smart Annuity Plus – Calculator
Let’s calculate how a person, who attained the age of retirement or 60 years, will need to pay to get Rs 1 lakh to Rs 50,000 per month under various options provided in the SBI’s retirement scheme.
Amount required for Rs 1 lakh after attaining 60 years.
SBI Life website provides a calculator on its platform to help customers get an idea of how much money they will have to pay to get their desired monthly, quarterly, half-yearly, or annual annuity. Here’s what the calculator shows for Rs 1 lakh per month under immediate annuity purchased at the age of 60.
Life annuity: A 60-year-old person will need to pay Rs 1,55,92,516 to get Rs 1 lakh per month from the scheme under this option.
Life annuity with return of purchase price: A 60-year-old individual will need to pay Rs 1,88,32,392 to get Rs 1 lakh per month from the scheme under this option. Annuity is payable at a constant rate throughout the life of the Annuitant and on the death of the Annuitant, all future annuity payouts cease immediately and the contract terminates.
Life annuity with return of balance purchase price: A 60-year-old person will need to pay Rs 1,60,40,636 to get Rs 1 lakh per month from the scheme under this option, as per the calculator on SBI’s website. Annuity is payable at a constant rate throughout the life of the annuitant and on the death of the annuitant, all future annuity payouts cease immediately and the purchase price is refunded to the nominee and the contract terminates
Life annuity with annual simple increase of 3 per cent or 5 per cent per annum: The calculator shows a 60-year-old person will need to pay Rs 2,04,11,635 under this option. Similarly for life annuity with annual simple increase of 5 per cent, an individual has to pay Rs 2,35,61,751. An increasing annuity is payable throughout the life of the annuitant which increases by a simple rate 3 per cent or 5 per cent p.a. for each completed policy year, as per the option exercised. On the death of the annuitant, all future annuity payouts cease immediately and the contract terminates.
Life annuity with a certain period of 10 or 20 years: The calculator shows a 60-year-old individual will need to pay Rs 1,57,77,018 and Rs 1,62,38,160 to get Rs 1 lakh per month for life annuity with a period of 10 and 20 years, respectively.
Life annuity with annual compound increase of 3 per cent per annum: The calculator shows a 60-year-old individual will need to pay Rs 2,20,83,180 under this option.
Life annuity with annual compound increase of 5% per annum: A 60-year-old person will need to pay Rs 2,90,27,676 under this option, as per SBI Life’s calculator.
Amount required for Rs 50,000 per month from age 60
Life annuity: A 60-year-old person will need to pay Rs 78,06,401 to get Rs 50,000 per month from the scheme under this option, as per the calculator.
Life annuity with return of purchase price: A 60-year-old individual will need to pay Rs 94,30,997 to get Rs 50,000 per month from the scheme under this option.
Life annuity with return of balance purchase price: The calculator shows a 60-year-old person will need to pay Rs 80,31,053 to get Rs 50,000 per month from the scheme under this option.
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Life annuity with annual simple increase of 3 per cent per annum: A 60-year-old individual will need to pay Rs 1,02,05,817 under this option.
Life annuity with annual simple increase of 5 per cent per annum: A 60-year-old person will need to pay Rs 1,17,80,876 under this option.
Life annuity with certain period of 10 years: A 60-year-old person will need to pay Rs 78,98,894 to get Rs 50,000 per month from the scheme under this option, as per the calculator.
Life annuity with certain period of 20 years: A 60-year-old individual will need to pay Rs 81,30,081 under this option.
Life annuity with annual compound increase of 3 per cent per annum: The calculator shows a 60-year-old person will need to pay Rs 1,10,41,590 under this option.
Life annuity with annual compound increase of 5 per cent per annum: A 60-year-old person will need to pay Rs 1,45,13,788 under this option.
Benefits of SBI Life – Smart Annuity Plus
Choice of Annuity Type
The policyholder can opt for either immediate or deferred annuity. If the immediate annuity option is chosen, the payouts will start a month, three months, six months, or a year after the plan purchase is made. The date of release of the first annuity pay-out shall depend on the type of annuity payment frequency chosen. Available pay-out frequency options are monthly, quarterly, half-yearly, and yearly. If the deferred annuity option is chosen, the pay-outs will start after the deferment period is over, as per annuity pay-out frequency chosen, as per SBI Life’s website.
Period of Deferment
The deferred annuity option is a choice for individuals who want to start their retirement planning early. They can opt for their annuity payments to begin any time after one to ten years of deferment period. The choice can be made depending on when you want the regular stream of income to begin.
Single Premium
This is a single premium policy, i.e., the policyholder is required to pay only once at the time of the purchase of plan. It can be beneficial for customers having a lump sum amount and are looking to find the right option to convert it into regular income.
Tax Benefits
You may be eligible for Income tax benefits/exemptions as per the prevailing Income Tax laws in India, which are subject to change from time to time. You may visit the SBI Life’s website for further details. Please consult your tax advisor for details, according to SBI Life.
