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guaranteed minimum interest rate, with no taxes due on any earnings until they are withdrawn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. Click View Report to see how much your annuity could be
worth.
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
Click Enter Data 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.
Information and interactive calculators are made available to you as
self-help tools for your independent use and are not intended to provide investment advice. We
can not and do not guarantee their applicability or accuracy in regards to your individual
circumstances. All examples are hypothetical and are for illustrative purposes. We encourage
you to seek personalized advice from qualified professionals regarding all personal finance
issues.
Note: The above information is not intended or written to be used as
legal or tax advice. It was written solely to support the sale of annuity products. As a
taxpayer, you cannot use it for the purposes of avoiding penalties that may be imposed under
the tax laws. You should seek advice on legal or tax questions based on your particular
circumstances from an independent attorney or tax advisor.
