Annuity Calculator - Calculatorall.Com
Our annuity calculator can help you with the forecast of your annuities' growth. The term annuity, in finance, is basically defined as something that refers to a terminating fixed payment stream over a particular time period. A couple of good examples would be monthly mortgage payments, or regular deposits made to savings account.
The annuity calculator here requires you to enter Starting Principal, annual rate of interest, annual or monthly addition and when to add it. As a result you will be able to get the end balance, total principal and total interest amounts for the annuity payments you made.
Annuity contracts are usually created when a person gives money to life insurance companies that is expected to grow on tax-deferred basis. Then there can be several ways of redistriion of the amount to its owner.
The annuities can usually be divided into two different phases. In first phase, the customer deposits the money in an account and it accumulates there while in the other phase the payments are made to the customers for a certain time period. In this second phase, income payments are made by the insurance companies and there can be a stated time period for that. The payment period can be as less as five years or as long as a lifetime of the customer.
Immediate Annuity vs Deferred Annuity
Immediate annuity and deferred annuity are actually two annuity types that one can opt for. The immediate annuity refers to guaranteed income for your remaining life. In this case, you won't be able to get a lump sum amount that you might have paid to insurance company over a period of time. You actually trade that opportunity off for security of your money.
Deferred annuity, on the other hand is built with time. You actually make it after depositing money for years until a particular date arrives after which the company pays you a lump sum of your money. These annuities can be variable or fixed.
With fixed annuities you get fixed ROR that your insurance company guarantees. In case of variable annuities, you invest in some stock portfolio and the bond accounts. The benefit you get with deferred annuity is that as you're building the capital, taxes can be deferred on it. However, variable annuities have complex tax context and before taking this route, you should first consult with your tax advisor.
So, investments like annuities should be dealt with proper preparation and careful study. And, that's where our annuity calculator comes into play. It gives you complete insights into whether a company's annuity is worth buying or not. Besides the information provided by our annuity calculator, make sure that you also talk to several independent advisors as well. After all, your decision is going to be a critical part of your retirement plan.So, try out our annuity calculator and decide which annuity option you are going to take!