Fixed Annuity Calculator
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Fixed Annuity Calculator |
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A Fixed Annuity can provide a very secure, tax deferred investment. It can provide
a guaranteed minimum interest rate, with no taxes due on any earnings until they
are withdrawn from the account. Use this calculator to help you determine how a
Fixed Annuity might fit into your retirement plan. |
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Definitions |
- Fixed Annuity
- A fixed annuity is an insurance product designed to provide
long-term, tax deferred savings. A fixed annuity can provide a guaranteed minimum
rate of return but may, however, have few investment options. You do not receive
a tax deduction on the money you deposit, but you pay no taxes until you begin making
withdrawals. There are no annual contribution limits or income limits. A fixed annuity
could be a good option if you wish to increase your tax deferred savings.
Fixed annuity contracts will have different rules, restrictions and expenses
that will vary by insurance company and by product within an insurance company.
To fully understand a fixed annuity, make sure you fully understand all options,
restrictions and expenses for your specific annuity before you enter into such a
contract. This calculator is not designed to describe a specific insurance product
and should be used as a general illustration of the tax deferred feature of a fixed
annuity.
- Starting balance
- This is the initial amount that you will contribute to
your Fixed Annuity.
- Annual contribution
- The amount you will contribute to your annuity each
year.
- Current age
- Your current age.
- Withdrawal age
- Age you wish to withdraw your annuity balance. This calculator
assumes that the year you start withdrawing funds, you do not make any contributions
to your annuity. So if you start withdrawals at age 65, your last contribution would
have happened when you were actually age 64.
- Current tax rate
- The current marginal tax rate you expect to pay on your
taxable investments.
- Retirement tax rate
- The marginal tax rate you expect to pay on your investments
at retirement.
- Surrender charges
- Press the "Enter Data" button to input surrender charges
for this Annuity. You are allowed to enter the year and percent of the surrender
charge. Surrender charges are a percent of the annuity balance you will be charged
if you withdraw your annuity balance early. The actual surrender charges vary widely
from annuity to annuity. Make sure to check with your investment advisor if you
are unsure of the surrender charges that may apply to your particular annuity.
- Taxable account's expected rate of return
- The annual rate of return you
would expect if you deposited this money into a taxable account. This calculator
assumes that your return is compounded annually and your contributions are made
at the beginning of each year.
- Initial interest rate
- This is the initial guaranteed interest rate for
your fixed annuity.
- Years initial rate is guaranteed
- The number of years the initial interest
rate is guaranteed.
- Expected average interest rate
- This is the interest rate you would expect
to average after the initial interest rate is no longer guaranteed.
- Minimum guaranteed interest rate
- This
is the interest rate that is guaranteed after the initial rate has ended.
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