Annuity Calculator

Calculate annuity growth during accumulation or income payouts during distribution. Compare fixed vs variable annuities and see the tax-deferred growth advantage.

Future Value After 20 Years

$396,531

Total Contributions

$170,000

Total Interest Earned

$226,531

Fixed vs Variable Annuity

Fixed Annuity

$396,531

Guaranteed 6.00% rate

Variable Annuity

$498,514

Avg ~7.50% with volatility

Tax-Deferred Growth Advantage

Tax-Deferred (Annuity)

$396,531

Taxable Account

$316,835

Tax-Deferral Benefit

+$79,695

At 25% marginal tax rate, deferring taxes on gains saves you $79,695 over 20 years of compounding.

Savings Composition

Contributions (42.9%)Interest (57.1%)

Balance Growth Over Time

$0$79K$159K$238K$317K$397KYr 1Yr 3Yr 5Yr 7Yr 9Yr 11Yr 13Yr 15Yr 17Yr 19Yr 20
Year-by-Year Accumulation Schedule (20 years)
YearBalanceContributionsInterestFixedVariable
1$59,252$56,000$3,252$59,252$60,092
2$69,074$62,000$7,074$69,074$71,001
3$79,502$68,000$11,502$79,502$82,796
4$90,573$74,000$16,573$90,573$95,547
5$102,328$80,000$22,328$102,328$109,322
6$114,807$86,000$28,807$114,807$124,191
7$128,055$92,000$36,055$128,055$140,226
8$142,121$98,000$44,121$142,121$157,495
9$157,055$104,000$53,055$157,055$176,072
10$172,910$110,000$62,910$172,910$196,034
11$189,742$116,000$73,742$189,742$217,467
12$207,613$122,000$85,613$207,613$240,465
13$226,585$128,000$98,585$226,585$265,141
14$246,729$134,000$112,729$246,729$291,621
15$268,114$140,000$128,114$268,114$320,055
16$290,819$146,000$144,819$290,819$350,617
17$314,923$152,000$162,923$314,923$383,506
18$340,515$158,000$182,515$340,515$418,947
19$367,685$164,000$203,685$367,685$457,191
20$396,531$170,000$226,531$396,531$498,514

How to Use the Annuity Calculator

This calculator has two modes. Accumulation mode shows how your annuity grows over time with regular contributions and compound interest. Payout mode calculates how much income you will receive from an existing annuity balance over a chosen distribution period.

Accumulation Phase

Enter your initial investment, monthly contribution, expected annual interest rate, and the number of years until you begin withdrawals. The calculator projects your future value, total contributions, total interest earned, and compares fixed vs. variable annuity outcomes. It also shows the tax-deferred growth advantage versus a taxable account.

Payout Phase

Enter your current annuity balance, the interest rate during distribution, payout period in years, and how often you want to receive payments (monthly, quarterly, or annually). The calculator determines your periodic payout amount and shows a year-by-year depletion schedule.

Frequently Asked Questions

What is an annuity and how does it work?+
An annuity is a financial contract between you and an insurance company. During the accumulation phase, you invest money that grows tax-deferred. During the payout (annuitization) phase, the insurer pays you a regular income stream. Annuities are commonly used for retirement planning to guarantee income you cannot outlive.
What is the difference between a fixed and variable annuity?+
A fixed annuity offers a guaranteed interest rate and predictable growth, making it lower risk. A variable annuity invests in sub-accounts similar to mutual funds, so returns fluctuate with the market. Variable annuities have higher growth potential but also more risk. This calculator models both so you can compare projected outcomes.
How does tax-deferred growth benefit an annuity?+
In a tax-deferred annuity, you don't pay taxes on investment gains each year. This lets your entire balance compound without tax drag. Over decades, this advantage can be substantial. For example, at a 6% return and 25% tax rate over 20 years, tax deferral can result in tens of thousands of dollars more in your account compared to a taxable investment.
How is my annuity payout amount calculated?+
Payout amounts are calculated using the present value of an annuity formula: PMT = PV x r / (1 - (1 + r)^-n), where PV is your account balance, r is the interest rate per period, and n is the total number of payment periods. This ensures your balance is fully distributed over the chosen payout period while continuing to earn interest.
When should I consider buying an annuity?+
Annuities are worth considering if you've maxed out other tax-advantaged accounts (401k, IRA), want guaranteed retirement income, or are concerned about outliving your savings. They work best as part of a diversified retirement strategy. Deferred annuities are most effective when purchased 10-30 years before retirement to maximize tax-deferred compounding.
What fees are typically associated with annuities?+
Common annuity fees include mortality and expense charges (1-1.5%), administrative fees, fund management fees for variable annuities (0.5-2%), and surrender charges for early withdrawal (typically 5-10% declining over 5-10 years). This calculator shows gross returns before fees. Subtract roughly 1-2.5% from the interest rate to estimate after-fee performance for variable annuities.

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Annuity Calculator — free online annuity calculator, annuity payout calculator, fixed annuity calculator, variable annuity calculator, annuity income calculator, retirement annuity calculator, tax-deferred annuity calculator. No signup required. Works in your browser.