Income Annuity Calculator
Calculate immediate and deferred income annuity payments. Compare fixed, variable, and indexed annuities. Understand payout rates, inflation impact, and guarantee periods.
Annuity Purchase
Payout rate increases with age. Age 55: ~4%. Age 65: ~5.5%. Age 75: ~7.5%
Payment Options
Deferred annuity: wait before starting payments. Higher payout when started.
Payments continue to beneficiary if you die within this period. Reduces payout rate.
Joint Life Option
Inflation Protection
Payout Rate Analysis
Base Rate:5.50%
Effective Rate:5.50%
Adjustments:
Annuity Payments
$2291.67
Monthly payment
Annual:$27500.00
Monthly:$2291.67
Inflation Impact Over Time
Year 1$2291.67
Year 10$1705.22
Year 20$1268.84
Without protection: purchasing power declines at 3.0% inflation
Projected Returns
Life Expectancy:25 more years
Expected Total:$687500.00
Break-Even:18.2 years
Est. IRR:1.50%
Comparison: Other Options
CD (4.5%):$22500.00/yr
Bond (5%):$25000.00/yr
Annuity provides guaranteed lifetime income but no liquidity. CD/Bond preserves principal but income ends when principal withdrawn.
Annuity Types & Considerations
- Fixed Immediate: Guaranteed payments for life. No market risk. Rate locked at purchase. Best for guaranteed retirement income.
- Variable: Payments linked to investment performance. Potential upside but risk of lower income. Fees typically 2-4% annually.
- Indexed: Hybrid: some guaranteed income + upside linked to index (S&P 500). Caps on gains, floors on losses. Complex.
- Joint Life: Payments continue to surviving spouse. Reduced rate (~15% lower) but protects both spouses.
- Deferral: Delay payments for higher rate. Good if income not needed immediately. 5% rate increase per deferral year.
- Guarantee Period: Payments continue to beneficiary if annuitant dies early. Reduces payout ~2% per guarantee year.
- Inflation Protection: COLA rider increases payments annually. Reduces initial payout ~25%. Critical for long retirements.
- Risks: Irrevocable once purchased. No liquidity. Company credit risk. Shop multiple insurers for best rates.