Annuity Calculator

Description

The Annuity Calculator on this page is based on the time-value-of-money or “finance theory” definition of annuity. By that definition, an annuity is a series of fixed payments over a certain amount of time. This annuity calculator was not designed to analyze an Insurance Annuity which can mean something entirely different from the finance theory definition.

Because of the general definition of annuity, an Annuity Calculator might calculate the future value of a savings investment plan (as many online annuity calculators do). I’ve already created a few savings calculators, so instead, I created the following Annuity Calculator to answer general questions related to taking a withdrawal or annuity payment from a fixed-rate savings account. Example questions might be:

What is the withdrawal or annuity payment per year over n years if I start with $P?
What do I need to have saved for retirement in order to withdraw $A per year for n years?
How many years can I withdraw $A if I start with $P?
Each of these questions is very easy to solve for using built-in Excel formulas, which I will explain in detail below. Or, you can just dive into the Annuity Calculator right now. Try the Savings Calculator if you are looking for a way to determine how much you will have saved by age 65 by making regular contributions.

Also, to figure out whether the initial payout (the first annual payment after you retire) is sufficient, you may want to use the Inflation Calculator to compare what you think you could live on based on today’s prices to what you may need the first year of your retirement.