This annuity calculator figures either the length in years of the payout phase by a desired withdrawal value, or the principal to own or the withdrawal revenue payment level within certain conditions you expect before retirement. Everything there is to know on this topic below the form.
How does this payout annuity calculator work?
This comprehensive finance tool allows 3 types of annuity calculations, by taking account of the annual rate of return which is a mandatory info, the withdrawals frequency and of one of the combinations of 2 out of the other 3 fields as explained below:
 First is forecasting the approximate annuity payout length in years. In this case you have to provide some values you expect for a Desired withdrawal amount and for the Starting amount / principal you assume you will have at the end in your annuity account.
 Second is estimating the savings end balance or the so called starting principal you should prepare for retirement by taking account of a Desired withdrawal amount during benefits time and a desired Annuity payout length in years.
 Third is the estimation of the withdrawal amount you may expect to receive if you specify a value within “Starting amount / principal” how much you expect you will have saved until retirement and how much do you expect to receive revenue within the field “Annuity length in years”.
This is a very flexible application since it allows any user choose between different withdrawals frequencies such as: monthly, bimonthly, quarterly, semiannually or annually.
Its algorithm is based on the standard compound interest rules and on annuity formulas:
 solve for n – number of periods;
 solve for the annuity payout;
 solve for the principal required.
Example of 3 results
 Calculation of the payout length in years:
In case of a plan that assumes an available principal amount of $200,000, with a return rate of 5% and a desired withdrawal amount of $1,500 expected month by month, the results displayed are:
■ The estimated length in years of the annuity is 16.06 years.
■ Withdrawals of $1,500.00 will take place Monthly.
■ Total interest earned during payout phase is $89,071.04.
 Forecast of the regular withdrawal amount:
If we look at an example that assumes a principal amount available of $300,000, with a return rate of 3.5% and a desired term to be paid out of 25 years with an annual withdrawal frequency, the results returned are:
■ The estimated withdrawal amount you will be able to receive with Annually frequency is $18,202.21.
■ Total interest earned during payout phase is $155,055.27.
 Estimation of the principal amount at the end of the accumulation phase:
For instance in case of someone who wants to know how much should save in account before retirement, if during benefits scheme the return rate would be 3.5%, the desired regular revenue would be $20,000 paid anually for a term of 25 years, the calculations will look as detailed within this table:
■ The estimated principal amount you should have already saved in account before starting payout is 329,630.29.
■ Withdrawals of $20,000.00 will take place Annually.
■ Total interest earned during payout phase is $170,369.71.
What is an annuity?
In finance theory annuity defines a set of regular payments made over a certain time period with the scope to achieve a specific money amount in an account either if is a regular or a retirement account or any similar; or with the scope to pay off a certain debt amount, for instance in case of mortgages paid on a monthly basis.
In United States this term is used to mean a financial product by which an individual lets an insurance company manage personal funds invested by case through a onetime payment plus some regular annual or monthly adds, or only by regular contributions with the final scope that the insurer will provide you with regular revenue starting the moment you specify. This kind of contract usually comprises several aspects such as:

The funds you have to deposit, invest and add on a regular basis during the accumulation period. It may be a onetime payment and/or regular contributions.

The accumulation term of the contract while you have to save;

By case a fixed return rate for your investment.

The fixed annuity quote often expressed as a percent that indicates the value of the withdrawal amount.

The withdrawals frequency meaning how often you will receive revenue within a year.

The age or the moment when you expect to receive revenue from the insurer.
As it can be easily observed from its terms and conditions, such product has two phases:

The accumulation phase refers to the number of years in which the client has to deposit funds into account. The insurance company will invest and reinvest this money in different yield financial instruments with the scope to multiply them.

The payout phase defines the term in which the client gets paid on a regular basis by the insurer.
For both parts this annuity calculator can help is simulating all assumptions on any of the 3 main sides of preparing for retirement: term and fixed revenue to be paid and savings level.
Types of annuities
People are acquiring such financial products at different times and for that must have some cash resources. Considering this aspect there are:
 Immediate annuity which refers to purchasing such financial product with a lump sum and then the client starts receiving revenue. This product type is preferred by people with a good financial standing that before retirement make this choice.
 Deferred annuity which is a contract by which the client has to make regular payments over a certain period of time. This strategy is preferred by people that acknowledge the need to put aside money well before retirement. Usually the payments are made either on an annually or monthly basis.
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