When thinking about retirement, some people want a high-level of confidence that certain financial needs can be addressed on a monthly or yearly basis. That's where a financial tool called an annuity can help. Use the calculator to start to learn the basic differences between an immediate and deferred annuity.
Input Parameters
Option 1
Option 2
Comparison Results
Option 1 Results
at Time of Payout: $0
Option 2 Results
at Time of Payout: $0
Understanding how two annuities work is the first step in evaluating whether one might fit your needs. It's important to remember that the guarantees of an annuity contract depend on the issuing company's claims-paying ability. Annuities have contract limitations, fees, and charges, including account and administrative fees, underlying investment management fees, mortality and expense fees, and charges for optional benefits.
Most annuities have surrender fees that are usually highest if you take out the money in the initial years of the annuity contract. Withdrawals and income payments are taxed as ordinary income. If a withdrawal is made prior to age 59½, a 10% federal income tax penalty may apply (unless an exception applies).
This is a hypothetical example used for illustrative purposes only. It is not representative of any specific investment or combination of investments. Annuities are not guaranteed by the FDIC or any other government agency. Actual results will vary.
Related Content
Making Your Tax Bracket Work
Have you explored all your options when it comes to managing your taxable income?
Choosing a Business Structure
Entrepreneurs all face the same question, “Which business structure should I adopt?”
Inventorying Your Possessions
Creating an inventory of your possessions can save you time, money and aggravation in the event you someday suffer losses.