A retirement annuity is a contract by which an insurance company agrees to provide you with a stream of income during your retirement years. Generally, a retiree may need about 60% of his/her last drawn salary to maintain his/her existing standard of living during retirement.  
 
 
The Employees Providence Fund (EPF) contribution can be an important source of retirement income, but a study by EPF also showed that majority of contributors spent all their savings within three years of withdrawal upon retirement. Retirement annuities ensure that you are taken care of for the rest of your life.
 
Things I Should Know

Do you have enough to retire?

Saving for an annuity

Choosing the right annuity

Making a complaint
 
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To ensure lifetime income, removing uncertainty and problems should you outlive your financial resources.
To guarantee income payment for your loved ones after your demise.
 
 
When it comes to choosing the right annuity:
 
Check all the options offered by various insurance companies
To ensure lifetime income, removing uncertainty and problems should you outlive your financial resources

Be aware that income payments you receive will depend on the amount you pay to purchase the annuity, your age when you purchase the annuity and your gender
Know that the type of annuity and its benefits determines the amount received during retirement
Buy the annuity plan that best suits your needs
 
 
    Immediate annuity
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      The income payments begin within 12 months after you buy the annuity. This is suitable for those who are about to retire or have already retired. The premium is paid as a lump sum at the time of purchase.
       
    Deferred annuity
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      The income payments begin more than 12 months after you buy the annuity. You may buy this type of annuity plans at any time during your working years. The premium can be paid as a lump sum, which will be left to accumulate with the insurance company, or you may make a series of periodic payments up till your retirement.
       
 
 
    Level annuity without guaranteed period
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      Pays a fixed regular income as long as you live.
       
    Level annuity with a guaranteed period
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      Pays a fixed regular income for the rest of your life, or at least for a guaranteed period. Example: A person purchases annuity with a guarantee period of 10 years, but dies after 6 years. The annuity payments continue to be paid to his beneficiary for the remaining 4 years. If the person outlives the guarantee period of 10 years, he will continue to receive the income payment for as long as he lives.
       
    Increasing annuity
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      Pays an income which increases each year at a specified rate to partially protect your income from inflation. With increasing annuity, the starting income is normally lower than you would get from a level annuity, but it will provide you with better income some years later in your retirement period.
       
    Joint-life annuity
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      Pays an income for the rest of your life, and then continues to pay the income to your partner for the rest of his/her life, after your demise. However, income to your partner may be for a reduced amount.
       
 
 
It is advisable to start saving as early as possible during your working years to build enough funds to provide you with a worthwhile income when you retire. However, should you have a savings arrangement that enables you to do so, it is still possible to purchase an immediate annuity upon your retirement.

Alternatively, you may want to consider purchasing a deferred annuity if you wish to pay a smaller premium,where the premiums paid earlier in life will be invested by the insurance company to provide for your retirement income.
 
 
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For more details, please download our booklet on retirement annuity or contact an insurance company for assistance.