Annuity Balance Calculator

Calculating the Remaining Value of an Annuity

This calculator can help investors determine the remaining value of their annuity as well as the annual payment received from the annuity. The calculator requires a total of four inputs:

  • The starting principal in the annuity fund
  • The years over which the user will receive annuity payments
  • The annual rate of interest earned on the funds in the account
  • The period the user wants to evaluate. For example, the annuity balance after ten years

Using this information, the calculator then provides the user with the following:

  • The value of the annual annuity payment over the period specified by the user
  • The balance of the annuity after the number of years specified by the user

Converting Cash to Annuities

Annuities have the advantage of providing a reliable source of income, which makes them attractive to retirees. By converting a lump sum of money into a steady stream of payments, retirees can more easily meet their monthly financial obligations. Some annuities offer lifetime benefits, which lowers a common fear of retirees – outliving their savings. In fact, some annuities can also be used as part of an estate planning strategy, allowing the owner to transfer wealth to their beneficiaries. Finally, annuities offer the opportunity to further diversify an investment portfolio, thereby insulating the owner from risk such as a near term bear market or economic recession.

Purchasing an Annuity

Whenever making a purchase decision, it’s important to understand the terms and conditions of the offer as well as understand the financial strength of the provider. Consulting with a financial advisor can help you better understand the pros and cons of the various features annuities have to offer. It’s also important to understand annuities can be purchased from several institutions. For example, insurance companies are a common source of annuities and typically offer the widest selection of options. At times, banks will partner with insurance companies to sell these investments to their customers. In addition to offering investors the opportunity to purchase common stocks and bonds, brokerage firms can also provide access to annuities offered by several insurance companies.

Interpreting the Results of Our Calculator

This calculator provides the user with two pieces of information. The first is a forecast of the annuity payment to be received over the payment period, balance year, interest rate and at the given starting principal amount. We have a number of annuity calculators that provide different information. This calculator assumes the user is ready to convert their money (starting principal) into an annuity and receive payments for a period of time (payment period). The calculator also provides the user with a forecast of the annuity balance as it is being drawn down.

For example, an annuity with a starting balance of 300,000 at an annual interest rate of 5.5% that is providing a payment of 19,566 over the course of 30 years will have a balance of 233,815 after ten years.