Annuity Calculator

The Annuity Calculator is intended for use involving the accumulation phase of an annuity and shows growth based on regular deposits. Calculate the future value of your regular contributions and visualize your investment growth over time.

Annuity Calculator

Modify the values and click the Calculate button to use

$
$
$
%
years

Results

End balance
$0.00
Starting principal
$20,000.00
Total additions
$0.00
Total return/interest earned
$0.00

Accumulation Schedule

Year数字表示经过的年数
YearAdditionReturnEnding balance

What is an Annuity?

An annuity is a financial contract that offers a series of payments over time, often used as a retirement strategy to create a steady income stream. It involves making regular deposits during an accumulation phase, which then grow with interest.

The accumulation phase is the period during which you build the value of your annuity through regular contributions and compound growth. This calculator helps you visualize how your annuity will grow over time based on your principal amount, regular additions, and expected growth rate.

Types of Annuities

Fixed Annuities

Provide a guaranteed rate of return for a specified period. They offer stable, predictable growth and are generally considered lower risk.

Variable Annuities

Invest your contributions in a selection of funds, similar to mutual funds. Returns depend on the performance of the underlying investments and can fluctuate.

Indexed Annuities

Offer returns based on the performance of a market index, such as the S&P 500, usually with a minimum guaranteed rate and a cap on maximum returns.

Ordinary Annuity vs. Annuity Due

Ordinary Annuity

Payments are made at the end of each period. Examples include bond interest payments or standard loan payments.

Annuity Due

Payments are made at the beginning of each period. Examples include rent payments or insurance premiums paid in advance.

The timing of payments affects the future value, as payments made earlier (annuity due) have more time to earn interest and therefore result in a higher end balance.

Annuity Calculation Formulas

For an ordinary annuity (payments at end of period), the future value formula is:

$$FV = PMT \times \frac{(1 + r)^n - 1}{r}$$

Where: PMT = payment amount per period, r = interest rate per period, n = number of periods

For an annuity due (payments at beginning of period), the future value formula is:

$$FV = PMT \times \frac{(1 + r)^n - 1}{r} \times (1 + r)$$

The formula for an annuity due includes an additional (1+r) factor, reflecting the extra period of interest earned on each payment.

Tips for Maximizing Your Annuity Growth

  • Start early to take advantage of compound growth over a longer period.
  • Make regular contributions to steadily build your annuity value.
  • Consider the impact of fees on your returns when choosing an annuity provider.
  • Understand the difference between ordinary annuities and annuities due, and how payment timing affects growth.
  • Balance your portfolio with a mix of annuities and other investments based on your risk tolerance and financial goals.

How to Use Our Annuity Calculator

  1. Enter your starting principal amount (if any).
  2. Input your regular addition amounts (annual and/or monthly).
  3. Select whether payments are made at the beginning or end of each period.
  4. Enter the expected annual growth rate.
  5. Specify the time period in years for your calculation.
  6. Click 'Calculate' to see your results and accumulation schedule.

This calculator helps you understand how your regular contributions will grow over time, allowing you to plan effectively for your financial future.