Annuity Calculator
With the Accurate Annuity Schedule Calculator, you enter a starting amount, rate of return, and the number of withdrawals you would like to receive and the calculator calculates the income amount and creates a schedule.
An annuity is a financial product that can provide a steady income for a defined period or for your lifetime in exchange for a lump sum or a series of payments. Annuities can be useful for retirement planning, but they also involve risks that you should review before you buy one. This annuity calculator helps you estimate the value of an annuity, create an annuity schedule with dates, and display charts that show the cash flow.
Annuity Schedule Calculator-calculates one of four unknowns.
To set your preferred currency and date format, click the “$ : MM/DD/YYYY” link in the lower-right corner of any calculator.
Information
Instructions for using the annuity calculator
Enter the four primary inputs: starting amount, regular withdrawal amount, number of periods, and annual interest rate. If any primary input is unknown, enter 0 in that field.
- Starting amount: The amount of money you plan to invest in the annuity.
- Regular withdrawal amount: The amount of money you plan to withdraw from the annuity on a regular basis.
- Number of periods: The total number of times you plan to withdraw money from the annuity.
- Annual interest rate: The assumed annual interest rate or return on investment that the calculator will apply to the annuity.
Additionally, you must provide the following values to create an accurate annuity schedule.
- Today’s date: The current date or the date when you expect to have the “Starting Amount” available.
- First withdrawal date: The date on which you plan to make the first withdrawal from the annuity.
- Withdrawal frequency: How often you plan to withdraw money from the annuity. For example, monthly, quarterly, semiannually, or annually.
- Compounding frequency: How often interest on the annuity is compounded. If you are not sure, you may set it equal to the “Withdrawal Frequency.”
Click the “Calc” button to display the annuity schedule with dates. If any primary input was 0, the calculator will compute the unknown value.
The annuity schedule displays the starting balance, withdrawal amount, interest earned, and ending balance for each period. The “Net Change” is the change in the balance from the prior period.
The charts display the cash flow, balance, and interest earned over the life of the annuity.
Risks to consider when purchasing an annuity
- Inflation risk: Annuities provide a fixed income stream. The purchasing power of the payments may decrease over time due to inflation. Consider inflation when evaluating an annuity. (See: Inflation Calculator to evaluate inflation’s impact.)
- Interest rate risk: Annuities are affected by interest rates. Changes in interest rates can affect the income received. If interest rates rise, the income from an annuity may be less attractive than income from other investments.
- Liquidity risk: Annuities are generally illiquid. It can be difficult to access the money invested in an annuity. If unexpected expenses occur, accessing funds may result in penalties.
- Credit risk: Annuities are backed by insurance companies. There is a risk that the insurer could become insolvent, which could reduce or eliminate income. Research the financial strength of the insurance company before purchasing an annuity.
Arno Marais says:
Hi, Compliments on a great calculator suite. Regarding the Annuity Calculator, can a parameter be added to allow for the annual adjustment (%) of the monthly withdrawal, to compensate for inflation ?
Are the calculators only web based now ? ie. no Windows, IOS etc.
Thank you
Arno Marais
Karl says:
Thank you. I’m glad you like the calculators.
As to your specific need, please try this Investment Calculator. Set the cash flow to "Income" which is a withdrawal. You will be able to adjust it for inflation.
Let me know if you need something even more flexible. I can probably come up with a solution using the Ultimate Financial Calculator.