Lifetime Annuity Calculator

Planning your financial future is daunting, especially when it’s hard to predict whether you will have enough funds to retire comfortably and enjoy the rest of your life worry-free.

Hence, many people have started to realize that one of the ways to ensure a comfortable future is to invest. Investing isn’t risk-free, but it does offer a lot of opportunities to grow your savings. Some investments are among the safest financial solutions available, for example, annuities.

This blog focuses specifically on a lifetime annuity, among other types, and here you can calculate annuity payments and estimate or adjust your financial plans.

What Is a Lifetime Annuity Calculator?

A lifetime annuity calculator is a tool that helps you estimate how much income you can receive from a lifetime annuity. Any insurance company that we partner with provides you with a lifetime annuity. In order to access this financial product, you need to pay a lump sum or a series of payments and, in exchange, you will receive a regular stream of monthly income for the rest of your life.

By typing your details into the annuity calculator, the tool will automatically estimate how much income you can receive.

Estimate How Much Monthly Income You Get with Our Annuity Calculator

Now that you’ve decided to invest in your financial stability with an annuity, fill out the following information in the annuity calculator and get free estimates.

Your age – The annuity calculator is typically available for people aged 55-85.
Sex – Based on your gender, the calculator will estimate life expectancy.
Investing amount – This is the amount you wish to contribute to your lifetime annuity.
Income starting age – Indicate at what age you wish to start receiving income payments.
Spouse’s age and sex– You can have an income annuity set for yourself and your spouse. In case of your death, your spouse will continue receiving the guaranteed income.

Once completed, you will see the results of how much retirement income you will be receiving for the rest of your life. In the calculator, it asks for the investment amount, but please note that you can usually choose between paying a lump sum or monthly premiums.

How Does a Lifetime Annuity Calculator Work?

You may have multiple investment opportunities like savings accounts and equity, but an annuity is a financial product that guarantees an income for the rest of your life. You either choose to pay a lump sum or monthly premiums.

Use our annuity calculator to ease and simplify your retirement planning. Simply input all the necessary details like age and sex, investing amount, and income starting age. The annuity calculator will swiftly pull all the data and provide you with estimates.

Feel free to modify the numbers to see how much of your retirement savings you would need to invest to guarantee sufficient annuity income for years.

How Much Lifetime Income Do You Need?

The amount of income you want to receive entirely depends on your way of living. If you are a more active kind of person who likes to travel around and try new things, then you will likely need more income than an average person. On the other hand, if you are more of a home sitter, you might not need as much to satisfy your needs.

Another factor is the riders you may want to purchase. Such riders as inflation protection, death benefit, or return of premium may add up to the total cost of your annuity.

What Are Other Types of Annuity?

A lifetime income annuity is else known as guaranteed lifetime income since the insurance company pays our income to the policyholder till death. You may also be interested in another type of annuity, such as:

Immediate Annuity

An immediate annuity is a financial product that operates in a similar way to a standard lifetime annuity. Instead of paying monthly income, an immediate annuity offers a one-time premium payment. Another difference is that you can start receiving income right after purchasing a product or within a year.

Immediate annuities are suitable for people who are already retired or about to retire and need a guaranteed stream of income.

Deferred Annuity

Unlike an immediate annuity, a deferred annuity is one that starts at a predetermined date. You can pay a lump sum or pay monthly and start receiving income in the future.

Fixed Annuities

Fixed annuities are considered the safest since the payout isn’t affected by inflation.

Variable Annuity

Contrary to fixed annuities, a variable annuity depends on the performance of the investment. Although you can have a higher rate of return, this investment is considered riskier than others because the rate may significantly drop.

Joint Annuity

A joint annuity is dedicated to the spouse of the annuitant. This is a way of securing lifetime income for both partners in case either of them dies.

Frequently Asked Questions

How does a lifetime annuity work?

A lifetime annuity is a contract between a buyer and an insurance company. An insurance company accepts your investment and guarantees a monthly or yearly income for the rest of your life. You can choose either to accumulate funds for bigger income payouts or decide to start receiving monthly income immediately after signing the contract.

How long does an annuity last?

A lifetime annuity provides a buyer with an income for the rest of their life. The only limit is your life expectancy, and even after your death, your spouse can continue receiving the payouts, and your heirs may obtain a death benefit. However, these riders have to be added to the contract.

What happens when an annuity owner dies?

When an annuity owner dies, an insurance company seizes the payments (if the annuity wasn’t joint). The company is also eligible to retain the money that wasn’t paid out to the annuity owner.

Can the remaining money be paid out to the heirs?

Yes, whatever money wasn’t paid out to the annuity owner can be passed to their heirs. However, this is the option for the annuities with return-of-premiums rider. Some annuities also offer a death benefit.

Is annuity income taxable?

Yes, annuity income is taxable unless it was funded with after-tax dollars. However, if you fund your annuity through non-deductible investments to a 401(k), the tax is partially lifted.

What is the investing limit in a lifetime annuity?

Typically, there is no maximum limit on how much money you want to invest. On the other hand, some insurance companies may have a minimum amount of investment to own an annuity.

What is the best age to buy an annuity?

A lifetime annuity is designed for retirees who want to receive additional income in the future. You can start investing in an annuity as early as 55 or purchase it with a lump sum at the ages of 65-75.

Final Word

Regardless of which type of annuity you opt for, they are one of the safest investment options out there. Thanks to our calculator, you will see how much monthly income you will be receiving or how much savings you need to collect before purchasing the annuity. In any case, our annuity calculator comes in handy and estimates how comfortable your financial future will be.