Why Retirement Lumpsums May Not Replace Regular Income

Saving money for retirement is important, but having a large lump sum is not the same as receiving a monthly paycheck.

Retired people still need money for regular expenses.

Annuities are financial products that can turn savings into regular payments.

Some annuities promise a fixed amount, while others link part of the income to market performance.

A fixed annuity offers more certainty.

A variable annuity may provide higher payments, but its market-linked portion can change.

In one illustration, a person invests ₹2 lakh each year for 10 years and begins receiving income at age 61.

The example’s payments depend on whether the annuity is fully guaranteed or partly linked to Nifty 50 returns.