Immediate Annuity Calculator
Immediate Annuity Calculator –When You’re Considering Immediate Annuities, Calculators Are Crucial
What exactly are immediate annuities? Well, an immediate annuity is basically an insurance policy for your future income. You the policyholder purchase a contract and pay a premium to the insurance company- generally a lump sum payment- and in return, the company guarantees you, the policyholder, a stream of income. This income can be deferred, immediate, or sporadic in the payments. The rate of growth of your invested premium may be fixed or variable in rate. Finally the income stream may be for a fixed duration or even for a lifetime. It all depends on your policy and the type of annuity. Bottom line, when you buy an annuity you are insuring that your money is safe, that it grows, and that you will receive income on your investment. To calculate how much you can expect from annuities, calculators are pretty essential! And an immediate annuity calculator is just one of many you might need when planning your retirement.
Immediate annuities in particular are often sold too early in a person’s life, and the rate of payout is too low to support their income requirements. A good immediate annuity calculator must take into consideration the annuitant- you- current age and current market conditions. Really, the best immediate annuity calculator is a qualified agent who can advocate for your interests and select the best thing for you. Shopping for an immediate annuity by web search alone does you a disservice ad there may be better, more lucrative options out there that you’re unaware of.
There are many types of annuities to suit many investment needs. The key is to focus first on YOUR needs. While compiling your requirements, you can educate yourself on annuities in general. Then, once you know what you need and how to select a good annuity from a bad one, it is appropriate to select a particular annuity contract that suits your exact need. Too often, investors are presented with a product first, without truly understanding what they need, why, and how it works- and it’s for this reason that annuities sometimes get a bad rap.
An immediate annuity calculator is not an ordinary calculator nor can an ordinary calculator be used to compute for annuities. As the name implies, immediate annuity calculators compute for the future value of an income stream, and how much fixed payment can be received with a particular investment over time.
There are specific calculators for each kind of annuity in the market. Every one has certain features that are not included with another, allowing for more specific operations. Here’s a few to chose from:
Deferred Annuity Calculator
Generally, when we say deferred annuity calculator, it can be used for computing both fixed and variable annuities, since these two have tax-deferred interest earnings. The calculator is designed to compute for the final balance which is accumulated earnings that can be withdrawn in the future.
Until the contract expires, the deferred annuity calculator will add up the balance over a specified period of time to determine the final account balance. A number of factors will be taken into consideration, which includes the amount of the initial investment, additional yearly contributions, the term of the contract, and also adjustments for current inflation.
Indexed Annuity Calculator
The indexed annuity calculator, as the name implies, is used for computing an equity indexed annuity, which though somewhat similar to deferred annuity, uses a different accumulation model. This type of annuity calculator relies on forward assumptions based on past performance. This allows the user to predict how well a particular index annuity would perform in the years to come, but it’s all to easy to over estimate performance. In addition, caps and participation rates, plus annual reset, high water mark, and point-to-point basis are used for these computations and market index tracking. It can be quite involved to get an accurate prediction from annuities calculators and again, you are likely better off with a quote.
Immediate Annuity Calculator
Immediate annuities begin providing income upon the payment of the lump sum premium to the insurance company. Depending on the term of the contract, this income would last until the expiration of the initial investment and compounded interest, or it may be a lifetime guaranteed income stream. It may even be tied to other factors such as a spouse’s lifespan. Immediate annuity calculators are typically used for determining the payment stream and require age and rate expectations that vary with market and each annuity company. Often, its best to just get quotes from a great agent who understands your needs, rather than look for the perfect immediate annuity calculator.