Annuity Calculator

This is an annuity calculator for the forecast of the growth of your annuities. By definition, the term of annuity is used in finance theory to refer to any terminating stream of fixed payment over a specified period of time, for example regular deposits to a savings account, monthly home mortgage payments etc.

In the United States an annuity contract is created when an individual gives a life insurance company money which may grow on a tax-deferred basis and then can be distributed back to the owner in several ways. There are two possible phases for an annuity, one phase in which the customer deposits and accumulates money into an account, and another phase in which customers receive payments for some period of time. During this latter phase, the insurance company makes income payments that may be set for a stated period of time, such as five years, or continue until the death of the customer. Please use our annuity payout calculator for this phase.

Starting Principal 
Annual Addition 
Monthly Addition 
    Add at each period's
Annual Interest Rate%


End Balance$27,943.29
Total Principal$20,000.00
Total Interest$7,943.29
Balance Accumulation Graph

RelatedAnnuity Payout Calculator | Retirement Calculator

An annuity is an agreement you make with an insurance company to provide you with regular payments in exchange for a lump sum.

You give the insurance company your money to manage, and in return they provide you with a policy, which includes a fixed, regular income for a specific period. You may seek such an income for a long regular period of your own choosing, one sufficient to cover your retirement, and this can be arranged, if the amount of money is sufficient, or you may only seek regular income for a certain period.

The great advantage of an annuity is that you are guaranteed the income without risk. The disadvantage is that you might have been able to earn more investing that sum of money.

There are two main types of annuities; Immediate or deferred.

An immediate annuity means the provision of guaranteed income for the rest of your life. It also means that you will never again be able to have the lump sum that you have provided to the insurance company. You give up the possibility of using that large sum for investment in exchange for security.

A deferred annuity is one that is built over time. You create it by making deposits over many years, until a specific date in which the lump sum is taken over by the company and an income is provided to you. Deferred annuities can be either fixed or variable. A fixed deferred annuity provides a fixed rate of return which is guaranteed by the insurance company. Unlike a fixed annuity, a variable annuity allows you to invest your funds in a portfolio of stock and bond accounts. The great advantage of a deferred annuity is that, while you are building up the capital, you can defer taxes on it. However, the tax context of a variable annuity can be complex, and, should you choose to go that route, you should consult with a tax advisor.

Clearly, an investment as important as an annuity should be the object of careful study and preparation. Talk to a number of companies and to independent advisors before making any decision. It is, after all, a critical one for your retirement.

Should you Place an Annuity within a Retirement Plan?

Retirement plans like 401Ks and IRAs have one primary purpose: To provide a regular guaranteed income for people when they have stopped earning a salary. Converting the income in the IRA to an annuity, and then withdrawing it within the parameters of the tax relief provided by the IRA offers a powerful solution for retirement.

The great advantage of an annuity, from the point of view of retirement, is that an insurance company can guarantee a regular income. Since an IRA is typically the largest pool of money that most people have and it is the one that is there to provide a regular guaranteed income, it makes great sense to place the annuity in it.

The annuity calculator is intended for the accumulation phase of the annuity, that is, while it is gathering funds. The annuity calculator shows the growth of the annuity based on regular deposits.