The Annuity Comparison Calculator compares the pay out performance of two annuities and converts their payout rates to an effective annual yield. This is especially helpful when dealing with two-tier annuities that have an annuity value and a significant market adjustment to the account if any other option is taken.
The calculator can be used in conjunction with the 90-24 Roll Over Calculator. This allows for the creation of a "What-If" scenario that shows the projected pay out of the accumulated balances if the individual were to stay where they are or to move the money.
The prompts are described below, followed by the calculations:
Prompts
Fund #1 - Name
Enter the name of Fund #1.
Fund #1 - Value
Enter the current value or the annuitization value of Fund #1.
Type Of Fund - Annuitization or Interest Rate Pay Out
Select the method for distribution of the account.
Annuity Rate or Interest Rate
This prompt will change depending upon the selection of the previous prompt. Enter the payout rate for the account.
To calculate the annuitization value, enter an annuity rate for the term of the annuity being purchased. Contact the company for the exact annuity rate, as these rates are interest sensitive and change frequently.
To calculate payout based on an interest rate assumption, enter the interest rate assumption to use over the term of payments.
Term
Enter the term of the pay out.
Final Value
When calculating using an annuity rate, the final value for annuities should always be "0." The principal is relinquished for a guaranteed payment.
When calculating for an interest rate payout, the final value should be set to the amount desired to be left at the end of the term.
Calculations
Annuity Rate / Interest Rate
This is the corresponding value for each shown. If an annuity rate and term are entered, the calculated interest rate is the annuity rate stated as the annual rate of return.
Monthly Payout
The amount of income to be paid each month.
Total Payout
The total amount paid over the term requested.
