- Fixed Annuity
- A fixed annuity is an insurance product designed to provide long-term, tax-deferred savings. A fixed annuity can provide a guaranteed minimum rate of return but may have few investment options. You do not receive a tax deduction on the money you deposit, but you pay no taxes until you begin making withdrawals. There are no annual contribution limits or income limits. A fixed annuity could be a good option if you wish to increase your tax-deferred savings.
Fixed annuity contracts will have different rules, restrictions and expenses that will vary by insurance company and by product within an insurance company. To fully understand a fixed annuity, make sure you fully understand all options, restrictions and expenses for your specific annuity before you enter into such a contract. This calculator is not designed to describe a specific insurance product and should be used as a general illustration of the tax-deferred feature of a fixed annuity.
- Starting balance
- This is the initial amount that you will contribute to your fixed annuity.
- Annual contribution
- The amount you will contribute to your annuity each year.
- Current age
- Your current age.
- Withdrawal age
- Age you wish to withdraw your annuity balance. This calculator assumes that the year you start withdrawing funds, you do not make any contributions to your annuity. For example, if you start withdrawals at age 65, your last contribution would have happened when you were actually age 64.
- Current tax rate
- The current marginal tax rate you expect to pay on your taxable investments.
- Retirement tax rate
- The marginal tax rate you expect to pay on your investments at retirement.
- Surrender charges
- Surrender charges are a percent of the annuity balance you will be charged if you withdraw your annuity balance early. The actual surrender charges vary widely from annuity to annuity. Make sure to check with your investment adviser if you are unsure of the surrender charges that may apply to your particular annuity.
- Taxable account's expected rate of return
- The annual rate of return you would expect if you deposited this money into a taxable account. This calculator assumes that your return is compounded annually and your contributions are made at the beginning of each year.
- Initial interest rate
- This is the initial guaranteed interest rate for your fixed annuity.
- Years initial rate is guaranteed
- The number of years the initial interest rate is guaranteed.
- Expected average interest rate
- This is the interest rate you would expect to average after the initial interest rate is no longer guaranteed.
- Minimum guaranteed interest rate
- This is the interest rate that is guaranteed after the initial rate has ended.
