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Annuity Break-Even Calculator

The annuity calculator helps you evaluate whether to invest your money in an annuity or in another investment instrument.*

  • Enter ballpark values by clicking on and dragging the sliders left or right. Enter exact numbers by clicking on the number in the box and type your number (no commas).
  • The results of your calculations show in the box near the bottom of the calculator.

Help

Investment Amount

This is the amount you plan on investing.

Tax Rate

This is the tax rate you expect to be applied to the withdrawals from a taxable investment other than the annuity.

Gross Returns

The gross return rate is the interest rate you would expect to earn if you invested in something other than an annuity.

Withdrawal Allowance

This is the rate at which you expect to make annual withdrawals from your annuity fund.

Interest Rate

The interest rate is what you expect to earn from the annuity for a specific year. You can set the interest for each of the ten years of the annuity.

Surrender Charges

Surrender charges are what an annuity will impose if it is cashed in before a agreed to period of time. This period generally runs from 1 to 12 years. A typical surrender charge is one that starts at 7% in the first year of the contract, and declines by 1% per year thereafter until it reaches zero. The charge is made against the value of the investment when the annuity is surrendered, and its purpose is to discourage a short-term investment by the purchaser. You can enter surrender charges for 10 years of the annuity.

Graph

The interactive graph shows accumulated values in an annuity compared with an alternative investment. The values above the graph change when you change the values for the annuity or for the alternative investment. Move the slider at the bottom of the graph to see values for a specific annuity year. The lines in the graph cross each other at the break-even point for the 2 options.

Results

The comparison is detailed in the results box.

*Calculators provided are estimation tools and do not necessarily reflect products, terms or rates that Home Federal Bank may offer. Please contact your Home Federal banker to verify results.

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