Is annuity better than SWP for retirement income?

Annuity provides guaranteed lifelong income (better for longevity risk) but the entire payout is taxed at your slab rate. SWP from equity MFs is taxed only on gains (~12.5% LTCG), leaving a growing legacy corpus. For most investors in 30% slab, SWP is more tax-efficient.

What is the typical annuity rate from LIC in India?

LIC Jeevan Akshay and Jeevan Shanti typically offer 5.5-7% annuity rates depending on age and mode (life annuity, joint, with return of purchase price). Rates are lower than FD but guaranteed for life.

What happens to annuity corpus after death?

In a 'life annuity with return of purchase price' variant, the full initial premium is returned to the nominee. In a 'pure life annuity', payouts stop at death with no refund. SWP leaves the entire remaining corpus as inheritance.

Annuity vs SWP Comparator

Compare lifelong annuity payouts against Mutual Fund SWP. Analyze tax efficiency, longevity risk, and legacy corpus.

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Quick Summary: Annuity vs SWP Comparator

The Annuity vs SWP comparison highlights that while Annuities offer guaranteed life-long income, SWPs (Systematic Withdrawal Plans) are often more tax-efficient in FY 2026-27. Annuities are taxed at slab rates, whereas equity SWPs only attract 12.5% LTCG tax on the gains portion, preserving more capital for your legacy.

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Last verified May 2026

Statutory Disclosure

Nature:Calculator platform and is NOT a SEBI-registered Investment Adviser. All calculations are indicative.

Risk:"Investments in securities market are subject to market risks. Read all related documents carefully before investing."

Consult a SEBI-registered IA or CA for personalised advice.

9 out of 10 traders in F&O incurred net losses (SEBI 2023). Tax estimates based on IT Act 2025. Trezoriq is not liable for financial decisions based on results.