Annuity Payout Calculator

An annuity payout calculator will help you estimate how much you may be able to accumulate in your annuity and how much you may expect to receive from it at your retirement age.

Initial Investment Amount

This is the beginning balance of your annuity plan. Usually, there is a minimum purchase payment requirement to open an annuity account. You may invest a lump sum amount, make periodic contributions or both. If you have other annuities, you can transfer those to your new account. Bear in mind that there may be surrender charges for the transfer. Unlike IRAs, there is no income eligibility requirement. However, your contributions are not tax deductible.

Regular Contribution

You can set up a systematic fund transfer plan to make contributions regularly. Some annuity payout calculators have contribution frequency options. Usually you can contribute weekly, monthly, quarterly or annually.

Annual Rate of Return

This is the anticipated average annual rate of return on your annuity investments from the current age to the expected retirement age. The calculators assume that the return is compounded based on your contribution frequency. Therefore, even 1% difference of the return may result very big difference for the retirement money. And make sure whether the contributions are made at the beginning of the year or the end of the year.

Fees and Charges

For your annuity payout calculator to generate more reasonable result, it's very important that you consider the amount of the fees and charges. For example, if you expect the sub-accounts of your annuity to earn 10 percent annually, but there are total 3 percent fees and charges, your actual net annual rate of return should be at 7 percent.

• Mortality and Expense Charges They cover insurance guarantees, administrative and operational expense, sales commissions and the management charges. In general, these fees in a variable annuity will be charged as a percentage of the average value of the investment.
• Surrender Charges Most annuities may charge you penalties for withdrawals during a certain number of years after you purchase your annuities. Surrender charges may be reduced or eliminated over time. You may be able to withdraw some percentage (10~15%) of the value of the annuity per year without incurring a surrender charge.
• Investment Management Fees These fees are usually assessed by variable annuities, and they are like those charged on mutual funds for investment management purposes. They will vary depending on your sub-account options within the annuity.
• Contract Management Fees The insurance company also may charge an annual fixed fee for the record keeping and administrative costs involved in maintaining your annuity.

Current Age

Your current age is the starting point of your retirement savings period. Annuities don't have an age limit for contributions.

Expected Retirement Age

Most calculators assume that you don't contribute to your annuity account after you retire. Therefore, the expected retirement age is the last year you make a contribution.

Payment Period

The payment period determines how long you will withdraw money from your annuity account.