Tag Archives: Annuity Calculator

Annuity Comparison: How to Find the Best Deal

For some people annuity seems like a dirty word, but really it can be a very useful way of managing your money and getting you through your retirement in a way that keeps you pretty financially stable. In the current economic climate, the thought of financial security or of having a regular income every month is a huge relief, and an annuity can really make that happen; but in order for that to happen you have to find the best annuity deal possible, and at the beginning of your search an annuity calculator can be useful.

Annuities are an investment, but a low-risk investment and in order to calculate what your returns might be it is a good idea to use an annuity comparison table. With an annuity calculator you input your age, gender, post code and any medical information that is asked for and the annuity calculator will give you an idea of the income you might expect to receive and the annuity rate that you will get. And with annuities, the rates that you get are crucial. When you buy an annuity, the annuity provider will use the money they give them to buy government bonds and gilts and the income that you will receive will in fact be the returns from that very investment.

While investments fluctuate at the best of times, an annuity is quite low risk, but it is all about the rate that you get, or put another way, the rate of return that you get. So how then do you find the best deal? It is quite simple. The best and only way to find the best deal is to shop around, most annuity providers have annuity calculators on their websites, and if they don’t have an annuity calculator then you can always phone for a quote. In this way you can get an idea of what you can expect from each annuity provider.

An annuity calculator will give you an idea of what annuity rates you can expect, but the rate is not a guarantee and in order to get a serious quote you will need to move from the annuity calculator to the phone or to a financial advisor. It is up to you to get the best deal for yourself but there are people around whose job it is to help you. So make use not only of the annuity calculator but also of the resources of financial knowledge that you have access to, and if you don’t have one, find one.

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.

Find our your potential Annuity Income today!

Several consumers are now looking toward annuities to help them sustain their current lifestyle during their retirement years. Annuities, in their varied types, seem to work very well for most consumer and retirees. However, many consumers who have invested in annuities, or are planning to do so, can only budget for the future once they know what their Annuity Income will amount to on a regular basis. There are a number of calculators online that can help consumers to calculate their annuity income. There is also a series of 5 easy tips that every consumer can perform to determine the amount of their annuity income:

1. Determine the type of annuity. Annuities can come either variable or fixed. A fixed annuity will have a guaranteed payout. However, the income determined by a variable annuity will depend very substantially upon the performance of the applicable investment.  The annuity could also be deferred or immediate. A deferred annuity means that payments have been postponed until a designated point in time. An immediate annuity doles out payments as soon as the consumer has made their very first contribution.

2. Choose the payout option. For most consumers, the standard payout option is the full amount of annuity over a designated period of time, with any leftover balance being paid out to a beneficiary. However, there are several other payout options available with most annuities. They can be paid out to the annuity owner or the owner and their spouse. There are also payout options that can combine two or more versions of different payout options.

3. Determine other details. There are other details of the annuity that may impact payout. These include such things as interest rate and principal balance. Knowing these details can help determine the annuity income received.

4. Calculate payment amounts. The manual formula for determining the payment amounts is as follows:

Annuity Value = Payment Amount x Present Value of an Annuity Factor (PVOA)

5. Make Adjustments.  If the annuity is not scheduled to be paid out right away, adjustments will have to be made in calculating the annuity income.  The interest rate will accrue on the annuity between now and the first payment and the number of years until the consumer begins receiving payments.

Using these five simple steps can help determine exactly what annuity income can be expected. There are a variety of annuity calculators also online but manually, these steps seem to produce the easiest and most efficient way of determining expected annuity income.