Annuity Calculator Calculate the future value of your annuity payments, see how much you'll receive in retirement, an...
Annuity Calculator
Calculate the future value of your annuity payments, see how much you'll receive in retirement, and understand the impact of different interest rates.
Illustration: Your annuity grows over time due to compound interest on your regular payments.
| Year | Payment | Interest Earned | Balance |
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An annuity is a financial product that provides a series of payments at regular intervals, typically used as a retirement income stream. It is often purchased with a lump sum payment or through a series of payments, and then pays out a fixed or variable amount over time.
There are two main types:
- Ordinary Annuity: Payments are made at the end of each period (e.g., end of each year).
- Annuity Due: Payments are made at the beginning of each period (e.g., beginning of each year).
Annuities are commonly used for retirement planning because they provide a predictable income stream, which can help ensure you don't outlive your savings.
Annuities can play a crucial role in your financial plan by:
- Providing guaranteed income — Many annuities offer lifetime income options, ensuring you won't run out of money in retirement.
- Offering tax-deferred growth — Like 401(k)s, annuities allow your money to grow without being taxed until you withdraw it.
- Protecting against longevity risk — As life expectancies increase, annuities can help ensure you have enough income to last your entire life.
- Customizing your payout — You can choose when to start receiving payments, how much you want to receive, and whether you want payments to continue to a beneficiary after your death.
To calculate your annuity's future value, enter:
- Annual Payment Amount — The amount you plan to contribute each year.
- Annual Interest Rate — The expected rate of return on your investment.
- Number of Years — The duration of your annuity payments.
- Payment Type — Choose between "Ordinary Annuity" (end of year) or "Annuity Due" (beginning of year).
- Compounding Frequency — How often interest is compounded (annual, semi-annual, quarterly, monthly).
Click “Calculate Annuity” to see:
- Your annuity’s future value
- Total payments made
- Total interest earned
- A visual chart showing the growth of your annuity
- An amortization table with details for each year
Note: This calculator assumes constant payments and a fixed interest rate. It does not account for inflation or variable rates.