Annuity Calculator

Project what a lump sum and steady monthly contributions could grow into at an assumed rate over your chosen horizon.

Quick answer: Project annuity accumulation: future value of a lump sum plus monthly contributions at an assumed growth rate, with contributions and growth split out.

How to use

  1. Enter the initial lump sum you would place in the contract.
  2. Add the monthly contribution you plan to keep up.
  3. Set an assumed annual growth rate and the years to accumulate.
  4. Read the projected value, your contributions and the growth portion.
  5. Rerun with a lower rate to stress-test the projection.

About this tool

During the accumulation phase, an annuity behaves like any compounding account: money in, growth on top, year after year. This calculator projects that phase. Enter an initial lump sum, a monthly contribution, an assumed annual growth rate and the number of years to grow, and it returns the projected future value, the total you contributed, and how much of the ending balance is growth. On the defaults, 50,000 dollars plus 500 dollars a month at 5.5 percent for 20 years reaches roughly 367,600, of which 170,000 is contributions and close to 197,600 is assumed growth. The rate is an assumption, not a promise; real contracts credit rates differently. Projections use your assumed rate and inputs only; actual annuity values, fees and contract terms depend on the specific product. Verify with official insurer disclosures. Not financial advice.Fixed annuities credit a declared rate set by the insurer, while variable annuities invest in subaccounts whose results ride the market. Variable contracts commonly layer mortality, expense and fund charges around 2 to 3 percent a year (approximate), which would flatten these projections materially. Surrender charges can apply for several years after purchase. Verify contract specifics and fees with official disclosures before committing.

FAQ

What is the difference between the accumulation and payout phase?
Accumulation is the years your money grows inside the contract, which is what this calculator models. Payout begins when you annuitize, converting the balance into a stream of income whose size depends on rates, your age and the payout option chosen. The two phases use completely different math, so do not read this projection as an income promise.
Fixed or variable annuity: what changes in this projection?
A fixed annuity credits a rate the insurer declares, so the projection behaves like the fixed percentage you entered. A variable annuity's subaccounts rise and fall with markets, so the assumed rate becomes a scenario rather than a schedule. The same contribution path can end far above or below this figure.
How much do fees drag on these projections?
Variable annuities commonly charge mortality and expense loads plus fund expenses, often totaling around 2 to 3 percent a year (approximate). Over 20 years that drag compounds: shaving 2 points off the assumed 5.5 percent growth cuts the default projection to roughly 274,000, about 94,000 lower. Read the prospectus fee table before counting on headline growth.
What are surrender charges?
Most annuities penalize withdrawals above a free amount during an early window, often 6 to 9 years, with charges that step down annually (approximate; schedules are contract-specific). Pulling out during that window can surrender several percent of the withdrawal plus possible tax penalties. Confirm the schedule in your contract before committing money you may need.
Is the projected growth rate a promise?
The rate in this calculator is an assumption you typed, not a contractual commitment. A fixed annuity binds the insurer only to its declared minimum, and variable subaccounts promise nothing. Insurers are regulated, but contract values are not deposit-insured the way bank accounts are. Treat the output as a scenario you can adjust, which is exactly why the stress-test step exists.
How are annuity gains taxed?
In the US, annuities grow tax-deferred, and withdrawals are generally taxed as ordinary income on the gain portion, with a 10 percent penalty on early withdrawals before age 59 and a half in most cases (rules vary by contract and status). That differs from capital-gains treatment on taxable accounts. Confirm specifics with a tax professional.
Why does the calculator split contributions from growth?
Because the two behave differently. Contributions are just principal, so they anchor expectations, while the growth line shows how much of the ending balance came from compounding at your assumed rate. If the growth slice looks too rich, lower the rate and rerun; honest projections survive stress tests.

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