Deferred Fixed Annuity Calculator
Project your annuity's growth during the accumulation phase before payments begin
Financial Disclaimer: This calculator provides hypothetical projections only. Annuity guarantees are subject to the claims-paying ability of the issuing insurance company. Consult with a financial professional before purchasing any annuity product.
Tip: Use the comparison feature to see how different interest rates affect your annuity's growth.
Annuity Projection Summary
Initial Premium:
Total Contributions:
Tax-Deferred Growth:
Estimated After-Tax Value:
$100,000.00
$50,000.00
$48,357.62
$154,838.94
Future Value at Annuitization: $198,357.62
Growth Projection
Year-by-Year Growth
| Year | Beginning Value | Contribution | Interest Earned | Ending Value |
|---|
How Deferred Fixed Annuities Work
Growth Phase
During the deferral period, your money grows tax-deferred at a fixed interest rate. The insurance company guarantees this rate, protecting your principal from market downturns while providing predictable growth.
Payout Options
- Lifetime income (annuitization)
- Period certain payments (e.g., 10-20 years)
- Lump sum withdrawal (may have surrender charges)
"Fixed annuities can provide stability in retirement portfolios, with average rates currently 20-30% higher than comparable CD yields for similar terms."
Benefits of Deferred Fixed Annuities
Principal Protection
Your initial premium is guaranteed against market loss. The insurance company assumes all investment risk, providing stability in volatile markets.
Tax-Deferred Growth
Earnings compound without annual tax liability, potentially accelerating growth compared to taxable accounts. Taxes are only due upon withdrawal.
Predictable Returns
Fixed rates eliminate guesswork about future account values, making retirement planning more accurate. Many products offer rate guarantees for 3-10 years.
Important: Most annuities have surrender charge periods (typically 5-10 years) with penalties for early withdrawals beyond allowed amounts (usually 10% per year).
Frequently Asked Questions
What's the difference between immediate and deferred annuities?
Immediate annuities begin payments within one year of purchase, while deferred annuities have an accumulation phase (often 5-30 years) before income payments start, allowing for tax-deferred growth.
Are annuity earnings taxable?
Earnings grow tax-deferred but are taxed as ordinary income when withdrawn. If purchased with after-tax dollars (non-qualified), only the earnings portion is taxable using the exclusion ratio.
What happens if I die during the deferral period?
Most contracts provide a death benefit to beneficiaries, typically the current account value or premium paid (minus any withdrawals), whichever is higher. Some offer enhanced death benefit riders for additional cost.
Can I access my money during the deferral period?
Most contracts allow annual penalty-free withdrawals (typically 10% of the value), but additional withdrawals may incur surrender charges during the specified period (usually 5-10 years).
How are fixed annuity rates determined?
Insurance companies set rates based on their portfolio yields (primarily long-term bonds) and business objectives. Rates are guaranteed for specified periods (1-10 years) and may adjust thereafter subject to minimum guarantees.