⏰ Deferred Annuity Calculator
Calculate deferred annuity payouts
Initial investment in the deferred annuity
Years before payouts begin
Years of payouts
How to Use This Calculator
Enter Principal Amount
Input the principal amount - the initial investment in the deferred annuity.
Enter Interest Rate
Enter the annual interest rate that will be earned during the deferral period and payout period.
Enter Deferral and Payout Periods
Enter the deferral period (years before payouts begin) and payout period (years of payouts). During deferral, the principal grows with interest.
Review Results
See the value at the start of payouts (after deferral growth), monthly payout amount, and total interest earned.
Formula
Value at Payout Start = Principal × (1 + r)^d
Monthly Payout = Future Value × (r/12) / [1 - (1 + r/12)^(-n)]
Where:
• Principal = Initial investment
• r = Annual interest rate
• d = Deferral period (years)
• n = Number of monthly payouts
Example Calculation:
If principal $100,000, rate 5%, deferral 10 years, payout 20 years:
• Value at payout start = $100,000 × (1.05)^10 = ~$162,889
• Monthly payout: ~$1,074
• Annual payout: ~$12,888
About Deferred Annuity Calculator
A deferred annuity calculator helps you calculate payouts for deferred annuities. Deferred annuities have two phases: (1) an accumulation/deferral phase where your investment grows with interest, and (2) a payout phase where you receive regular payments. During the deferral period, no payments are made, and the principal grows with compound interest. At the end of the deferral period, payouts begin based on the accumulated value. This calculator shows you the value at the start of payouts and the monthly payout amount.
When to Use This Calculator
- Deferred Annuity Planning: Plan for deferred annuity purchases
- Retirement Planning: Understand future annuity income
- Payout Estimation: Estimate payout amounts after deferral
- Comparison: Compare deferred vs. immediate annuities
Understanding Deferred Annuities
- Deferral Phase: Investment grows with interest (no payouts)
- Payout Phase: Regular payments begin after deferral period
- Growth: Principal grows with compound interest during deferral
- Tax Deferral: Interest grows tax-deferred during deferral
Why Use Our Calculator?
- ✅ Payout Calculation: See payout amounts after deferral
- ✅ Growth Analysis: See how principal grows during deferral
- ✅ Planning: Plan for future annuity income
- ✅ Comparison: Compare deferred vs. immediate annuities
- ✅ 100% Free: No registration or payment required
Frequently Asked Questions
What is a deferred annuity?
A deferred annuity is an annuity contract where payouts begin at a future date (after a deferral period). During the deferral period, your investment grows with interest. At the end of the deferral period, payouts begin based on the accumulated value. Deferred annuities allow for tax-deferred growth and are often used for retirement planning.
How does a deferred annuity work?
A deferred annuity works in two phases: (1) Accumulation phase - you invest money, and it grows with interest for a deferral period (e.g., 10-20 years) with no payouts. (2) Payout phase - after the deferral period, you begin receiving regular payments based on the accumulated value. The longer the deferral, the more the principal grows, resulting in higher payouts.
What's the difference between deferred and immediate annuities?
Deferred annuities have a deferral period (accumulation phase) before payouts begin, allowing the principal to grow. Immediate annuities begin payouts soon after purchase (typically within 12 months). Deferred annuities are for future income needs, while immediate annuities are for current income needs.
Are deferred annuities a good investment?
Deferred annuities can be suitable for retirement planning, providing guaranteed income in the future. Benefits include tax-deferred growth, guaranteed payouts, and protection from market volatility. However, consider fees, surrender charges, lower returns than stocks, and limited liquidity. Evaluate your goals, risk tolerance, and other retirement savings options before purchasing.