Annuities and Self-Managed Drawdowns
Once you stop earning, your corpus needs to become an income stream — and you have two core options. Annuities (the “Annuity Alphabet” — Life, ROP, Joint Life, Annuity Certain, Increasing, Deferred) hand your money to an insurer in exchange for guaranteed payments for life, offering longevity protection but typically modest, taxable returns of 6–7%. Systematic Withdrawal Plans (SWPs) keep your corpus invested and let you withdraw periodically — offering flexibility and significant tax efficiency since only gains are taxed, but carrying market risk. This guide recommends a hybrid “floor + upside” approach: cover essential expenses with guaranteed income, and use SWP for the rest — and previews how the new 2025 NPS rules change the annuity equation entirely.