Annuity Calculator
The annuity calculator helps you evaluate whether to invest your money in an annuity. Click on a number in an edit field and type in the exact value you want, or explore "what-if" possibilities by clicking and dragging the diamond-shaped sliders.
 
The following explains the variables you can use in making your decision.

Note: The examples below are based on the assumption that the calculator is refreshed with the default values loaded.

Investment Amount   This is the amount you plan on investing.
  You might ask yourself, 'If I invest $25,000 in an annuity, what will my balance be in 10 years?' Or, 'Will the annuity grow faster if I invest $60,000 instead of $50,000?
Tax Rate   This is the tax rate you expect to be applied the withdrawals from the annuity. Again, you may enter a ballpark rate by using the diamond-shaped slider. If you want a more precise rate, you may enter it in the edit box.
  For example, you might wonder, 'If my tax rate is 28% now and I move up to a 33% tax rate, how much will that affect my annuity balance?' Or, 'If my tax rate drops down to 15%, how much more will my annuity grow?'
Gross Returns   The gross return rate is the rate that you would expect to earn on your investment amount if you chose to incest in something else. you may enter a ballpark rate by using the diamond-shaped slider. If you want a more precise rate, you may enter it in the edit box.
  For example, you may ask, 'Should I invest my $50,000 in an annuity that earns 6% a year or in an alternative investment that earns 8%?' Or, 'If an annuity earns 7% a year and my alternative investment earns 7%, which one should I invest my $50,000?'
The next set of variables allows you to provide information about the annuity: 
Withdrawal Allowance   This is the rate at which you expect to take as a withdrawal allowance for each year that you invest in the annuity. you may enter this rate by using the diamond-shaped slider. If you want a more precise rate, you may enter it in the edit box.
  For example, you may ask, 'Should i take a 10% or a 15% allowance from the annuity?'
Interest Rate   The interest rate is what you expect to earn from the annuity for a specific year. You can set the interest for each of the ten years of the annuity. You may enter a rate for each year by using the diamond-shaped slider. If you want a more precise rate, you may enter it in the edit box.
For example, you might wonder, 'Should i invest in an annuity that earns 7% a year, or in one that earns 5% in the first 3 years and then increases by 1% a year for the rest of the annuity?' Or, 'Should I invest in an annuity that earns 6% the first three years, 5% the next two years, and then 7% the rest of the life of the annuity?
Surrender Charges   Surrender charges are what an annuity will impose if it is cashed in before a specific period of time.This period generally runs from 1 to 12 years. A typical surrender charge is one that starts at 7% in the first year of the contract, and declines by 1% per year thereafter until it reaches zero. The charge is made against the value of the investment when the annuity is surrendered, and its purpose is to discourage a short-term investment by the purchaser. For years 1 through 10 you may enter a rate for each year by using the diamond-shaped slider. If you want a more precise rate, you may enter it in the edit box.
For example, you might ask, 'Should I invest in an annuity that has surrender charges of 5% per year?' Or, 'Should I invest in an annuity that has surrender charges of 7% the first four years and then decreases by 1% per year the rest of the life of the annuity?
Balance at Year X   This slider on the x-axis of the graph allows you see what your balance will be if you invest in the annuity or your alternative.

For example you may ask yourself,'If I invest $50,000, have a tax rate of 28%, and my alternative investment will provide a gross return of 6%, what will the value of the annuity and my alternative be in year 5?'
 
As you enter values for the above items, you will notice that the graph to the right displays the balance of the annuity and your alternative over a period of 10 years You can get an idea of your situation after you enter the interest rates and surrender charges for the years of the annuity.

Here is a sample list of questions that can be answered: 

     'Should I invest $100,000 in an annuity when I can get a gross return of 10% in an alternative?' 'If my tax rate is 15% now and goes up to 28%, how much would my annuity balance be in year 10?' 'How much would an annuity with surrender charges of 7% each year compared to one with 7% the first 3 years and 1% the rest of the annuity affect my balance?'
 
As always, the answers are only as far as a mouse click or a mouse drag away. Your answers appear in the results window at the bottom. Have fun playing with the planner.
 
In addition, the payment schedule tab shows the amortization schedule for the chosen loan.