Most annuity calculators online are simply a web form to get in touch with the annuity provider. Click Quote Save, annuity calculator, is a free way to calculate just how much income one can generate from an annuity investment for free online. We have worked with countless annuity carriers to provide you with a free calculator that can be used without giving personal information. Our calculations are more accurate than mosts as we update our calculator on a quarterly basis. Figuring out how much income an annuity can generate for you is half the battle. Many seniors are looking for a safe investment and are online trying to work out just how much their nest egg can provide them in income for their retirement. The best advice we can give you is that comparison shopping multiple quotes is the best way to get the highest annuity rates, this is what we do here at Click Quote Save.
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All about annuity calculators
One of the challenges of shopping for annuities is the number of products on the market, each with different features and rates.
One way to help you estimate how much you can receive from an annuity is using an annuity calculator.
Annuity calculators are simple tools found online. You simply input the information requested — which only takes a few minutes, if that — and the calculator will spit out estimates of how much the annuity will pay for a certain period or even lifetime income.
Annuity calculators save you from having to do the math of compounding interest during the annuity’s accumulation phase and figuring a payout percentage for the distribution phase. You can do an infinite amount of calculations with different amounts, crediting rates and deferral periods.
Some of the different inputs offered by annuity calculators include:
Starting balance. The initial amount you will contribute to your annuity.
Annual contribution. If an annuity allows contributions after the initial premium, you can determine the impact of those deposits on your overall account value.
Current age and withdrawal age. You can see the impact of waiting a few years to buy an immediate annuity or receiving income on your deferred annuity.
Current tax rate. Some calculators will demonstrate your tax savings from the tax deferral offered by annuities.
Retirement tax rate. By estimating what you expect your tax rate to be in retirement, you can receive an estimate on how much in taxes your annuity payments will cost.
Surrender charges. Some annuity calculators can show the impact of surrendering your annuity before the surrender charge period.
Interest rate. if you’re considering a fixed annuity, you can input the guaranteed rate credited each year to the account value. If considering a variable annuity or indexed annuity, you will have to estimate an average rate of return.
Payout rate. The calculator will show how much income you can generate based on the payout rate of the annuity’s account value offered by the insurance company. You can see what your payout will be if you want a single life payout, a joint payout and/or a period certain payout.
If you use a calculator provided by an insurance company or annuity agent, they will often use pre-determined rates already inputted based on what their products are currently paying. So in that case you will likely include just your age, gender, the amount you want to deposit and how long you can defer income.
Calculators you find on independent sites will allow you to input different accumulation rates and payout rates to help you compare products from different carriers.
In addition to helping your compare products, an annuity calculator can also help you plan for retirement. Start by estimating how much annual income you will need in retirement, factoring annual inflation of about 2 to 3 percent. Then add up the sources of income you plan to have in retirement, such as employment income, Social Security, pension, rental income, etc.
If there is a gap between what you need and how much you can count on earning, then you could use the annuity calculator to help fill that gap. By inputting a desired amount of income you want to receive from an annuity, you can get an estimate of how much to deposit into the annuity and how long you should defer income.
An annuity calculator can also help you determine if you should dedicate a large sum of money to an annuity or keep it in a savings or other account.
First, determine how much annual lifetime income that sum will generate from an annuity. Then figure out how long that money might last in a savings account or 401(k) if you withdrew the same amount of annual income as the annuity will provide.
Keep in mind that annuity calculators only provide estimates. You will want to review your actual contract to know for sure how much your annuity will pay out. For deferred variable and indexed annuities in which the interest credited can vary from year to year, you will need to estimate an average return during the accumulation years.
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