Tag Archives: Annuities Calculator

What is an Annuity Calculator?

Before we know what an annuity calculator is, we need to know what an annuity itself is. From the moment that you started working you began saving money in your pension; either a pension set up through your employers and/or one that you set up for yourself. You save and save for years but what do you do with that money once you reach the age to start thinking about retirement?

At this stage you will no doubt begin looking into the best ways to make the pension you have saved last you until you no longer need it. There are many options for you to choose from and an annuity is one of them. If you choose an annuity, you will take the capital that you have saved in your pension fund and you will exchange this for an annuity. This annuity will guarantee you an income for the rest of your life. Naturally this is quite a good option because it means that you will have a regular income, most commonly on a monthly basis, but potentially on a quarterly, bi-annual or yearly.

You may like to know what your annuity might be if you chose this option. This is where an annuity calculator becomes useful. An annuity calculator will give you an indication of the income that you might expect to receive from your annuity. What the annuity calculator will give you is only a guide, and should you wish for a more accurate quote, you will need to contact the annuities provider directly.

The annuities calculator will take a number of factors into consideration when estimating your annuity. You will be asked what your age is, and what your sex is. You will also be asked where you live, if you smoke or are overweight. All of these bits of information will be used by the annuity calculator.

If you are pleased with the guide given to you by the annuities calculator then you should consider getting a formal quote. There are a variety of annuities providers, who will offer slightly different annuities and it is best to get quotes from as many as possible in order to make an informed and beneficial choice. Annuities can be extremely useful in setting yourself up for a financially secure retirement, which you will no doubt deserve after years of saving towards your pension.

Which Annuities Calculator Computes The Best Deal?

At the simplest level, the way an annuity works, is that when you retire you use the pension fund you have accumulated in order to buy an annuity. This annuity is bought, essentially in exchange for an income that you will receive for the rest of your life. An annuity calculator can be useful here. An annuity can operate both as an investment and as a way to effectively manage your money.

This all relies however on the proper functioning of the annuities market, which like all other markets at the moment, is not at its most stable. Logically then, you may feel a bit more apprehensive about the choice to take out an annuity and then of course, which annuity product to decide on.

Finding the right annuity is really about good educated research and knowing what your options are. There are many websites and experts that can help you make an informed decision but you might like to know what you can expect. And this is where an annuities calculator comes in. An annuities calculator can provide a quick bit of information on the level of income that you can expect based on what the size of your pension fund is as well as other factors mentioned later. The choice to take out an annuity is a very popular one in the UK.

What you want then is the best possible annuity rate and this will take some shopping around, where the annuities calculator can also be helpful is to see how including and excluding certain options can change the annuity rate. For example increasing your income or adding a period of a guaranteed minimum payment can change the annuity rate.

The annuities calculator will ask for a few necessary details. These will include your age, gender, fund size and then all you have to do is to click the calculate button. The income you will receive from your annuity will be founded on choice that will give you the highest income; however, you can play around with the options to see what other choices you might have such as a single life annuity or joint life annuity.

An annuities calculator is not the be all and end all in the quest to your annuity rate, it is used as a preferred guidance tool and to give you an idea of the best annuity rates that you can find, and the options that you have available to you. It is a research tool, not a guarantee and the same is true of calling in a query.

Uses of an Annuities Calculator

Just like pension, an annuity is a distribution of lifetime savings that are earned within a specified period or even paid at one go.  This is later distributed or paid to the annuitant after he or she attains an age of 62 years. Unlike a pension where one is paid the whole lump sum of money, an annuity is distributed as an annual income once one retires, and is determined by the amount of money the annuitant has accumulated or agreed to pay as annuity.

An annuities calculator on the other hand is a spreadsheet that helps one determine the amount of money to pay as annuity. This calculator calculates the amounts depending with the market conditions and economy, and gives an exact amount of money that one is required or willing to pay as per his or her preferences. This calculator gives you an exact amount of what you need to pay per month, or yearly as per your specifications, and is a key tool used by insurance brokers to calculate insurance rates for people.

The other use of this calculator is to help predict life expectancy rates in relation to the current rates, which is also determined by the company offering the same. However, if you are looking for an annuity service provider to use, you will need to make sure shop around for similar companies, and then select a company with cheaper rates to use.

Nonetheless, you also need to be aware of the annuity rates before you can set a fixed amount of money to pay as annuity. An annuity calculator on the other hand acts as a guiding tool that has helped many novices understand what and how much it will take them to secure a better future.

One thing you need to know for sure is that, the less the amount of money you pay for annuities, the less the amount you will receive during your old age. The calculator can help you make a distinctive budget on the amount of money you want to be receiving per month, which means you will be able to set yourself for that, or even change your lifestyle.