A fixed annuity is an investment product designed to
provide long term, tax deferred savings. You do not receive a tax deduction on
the money you deposit, however you pay no taxes on any interest earned until
you begin making withdrawals. Unlike IRAs (both Roth and Traditional IRAs)
there are no annual contribution limits or income limits. A Fixed Annuity could
also a good option if you have already contributed the maximum amount to your
IRA and wish to increase your tax deferred savings. Unlike a Variable Annuity
that has no guaranteed rates of return, a Fixed Annuity will provide a
guaranteed minimum rate of return. A Fixed Annuity, however, will have fewer
investment options.
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. So
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
Press the "Enter Data"
button to input surrender charges for this Annuity. You are allowed to enter
the year and percent of the surrender charge. 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 advisor 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.
