Deferred Annuity Calculator
Calculate accumulation value and withdrawal amounts for deferred annuity investments
Calculate Deferred Annuity
📈 Accumulation Phase (Deferral Period)
One-time payment at the start
Regular monthly deposits
Time before withdrawals begin
Interest rate during accumulation
💰 Payout Phase (Withdrawal Period)
Interest rate during payout
📊 Calculation Results
Accumulation Phase Summary
Payout Phase Summary
Accumulation Formula: FV = PMT/i × ((1+i)^n - 1) × (1+i) [for annuity due]
Payout Formula: PMT = PV × r / (1 - (1+r)^-n)
Tax Benefit: Deferred annuities offer tax-deferred growth during accumulation
Example Calculation
Deferred Annuity Example
Accumulation Phase:
• Initial Investment: $20,000
• Monthly Contributions: $500
• Accumulation Period: 20 years
• Annual Return: 5%
Calculation Steps
1. Future Value of Lump Sum = $20,000 × (1.004167)^240 = $54,274
2. Future Value of Contributions = $500 × [((1.004167)^240 - 1) / 0.004167] = $205,505
3. Total Accumulation = $54,274 + $205,505 = $259,779
Payout: $1,321 monthly for 20 years (at 4% return)
Deferred Annuity Phases
Accumulation Phase
Build wealth over time
Tax-deferred growth period
Payout Phase
Receive regular income
Scheduled withdrawals begin
Types of Deferred Annuities
Fixed Deferred
Guaranteed interest rate, like a CD
Variable Deferred
Returns based on investment performance
Equity-Indexed
Returns linked to market index performance
Deferred Annuity Tips
Tax-deferred growth during accumulation
Start accumulating early for compound growth
Consider fees and surrender charges
Plan withdrawal timing carefully
Penalties may apply for early withdrawals
Understanding Deferred Annuities
What is a Deferred Annuity?
A deferred annuity is an insurance contract that allows you to accumulate funds over time and receive regular income payments starting at a future date. Unlike immediate annuities, deferred annuities have two distinct phases: accumulation and payout.
Key Benefits
- •Tax-Deferred Growth: Earnings grow tax-free during accumulation
- •Flexible Contributions: Make lump sum or regular payments
- •Guaranteed Income: Predictable retirement income stream
- •Death Benefits: Protection for beneficiaries
Formula Explanation
Accumulation Phase:
FV = PMT/i × ((1+i)^n - 1) × (1+i)
Payout Phase:
PMT = PV × r / (1 - (1+r)^-n)
- FV: Future value at end of accumulation
- PMT: Regular payment amount
- PV: Present value (accumulated amount)
- i/r: Periodic interest rate
- n: Number of periods
Important: Consider fees, surrender charges, and tax implications when evaluating deferred annuities. Consult a financial advisor for personalized advice.