Annuity Calculator
Plan your retirement savings, calculate required nest egg, and determine safe withdrawal rates for financial independence.
Annuity Configuration
Accumulate value, then receive payments later
Initial lump sum investment
Regular contribution amount
Years of making payments
Years before withdrawals begin
Expected annual return
Advanced Settings
Management fees and expenses
Annual withdrawal rate in retirement
Expected lifespan for calculations
Expected annual inflation
Tax rate on gains
Annuity Analysis
Accumulation Value
Total value at retirement
Monthly Income
Retirement income
Interest Earned
Total growth
Contributions vs Interest
Income Analysis
Payout Options
Risk Analysis
Inflation & Tax Impact
Annuity vs Alternatives
Yearly Projections
| Year | Contributions | Growth | Balance |
|---|---|---|---|
| 1 | $6,000 | $5,500 | $110,000 |
| 2 | $6,000 | $6,050 | $120,400 |
| 3 | $6,000 | $6,622 | $131,216 |
| 4 | $6,000 | $7,217 | $142,465 |
| 5 | $6,000 | $7,836 | $154,163 |
| 6 | $6,000 | $8,479 | $166,330 |
Annuity Considerations
- • Annuities provide guaranteed income but limit liquidity
- • Compare fees carefully - they can significantly impact returns
- • Consider inflation protection features for long-term income
- • Variable annuities offer upside potential but more risk
- • Immediate annuities work best close to retirement
- • Evaluate surrender periods and early withdrawal penalties
How it works
An annuity is a series of equal payments over time. This calculator finds either its future value (what a stream of contributions grows to) or its present value (the lump sum today that's equivalent to a future stream). It's the math behind retirement income, structured settlements, and lottery “lump sum vs payments” choices.
Future & present value of an annuity
FV = PMT · [(1 + r)ⁿ − 1] / r PV = PMT · [1 − (1 + r)⁻ⁿ] / r
- PMT
- payment each period
- r
- interest rate per period
- n
- number of payments
Worked example
- Payment PMT = $1,000/year
- Rate = 5%
- 20 years
- FV = 1,000 × [(1.05²⁰ − 1) / 0.05]
- FV = 1,000 × 33.07
Future value ≈ $33,066 from $20,000 of payments — the rest is compounding.
Good to know
- An ordinary annuity pays at the end of each period; an annuity-due pays at the start and is worth slightly more (one extra period of growth).
- Present value is why a lump sum usually beats the “total” of future payments — money now can be invested.
- A higher discount rate lowers the present value of future payments and raises the future value of contributions.
Related Calculators
Frequently Asked Questions
What is an annuity?
An annuity is any series of equal payments at regular intervals — retirement income streams, loan payments, and lottery payouts all qualify. This calculator finds the future value of a stream of contributions or the present value of a stream of payments.
What is the difference between an ordinary annuity and an annuity due?
An ordinary annuity pays at the end of each period; an annuity due pays at the beginning. Each annuity-due payment compounds one extra period, so it is worth slightly more — multiply the ordinary annuity value by (1 + r) to convert.
How is the future value of an annuity calculated?
FV = PMT × [(1 + r)ⁿ − 1] / r, where PMT is the payment per period, r the rate per period, and n the number of payments. Contributing $1,000 a year at 5% for 20 years grows to about $33,066 — $13,066 of it pure compounding.
Should I take a lump sum or a stream of payments?
Compare the lump sum with the present value of the payment stream at a realistic discount rate. A lump sum is usually worth more than the same nominal total of future payments because money in hand can be invested — but spreading payments can suit taxes and spending discipline.
How do insurance-company annuities differ from this math?
Commercial annuities layer fees, surrender charges, and longevity assumptions on top of the basic time-value formulas. A lifetime annuity pays until death by pooling risk across many buyers, so its quote will not match a simple fixed-term calculation — compare provider quotes carefully.