Annuity Calculator
“Annuity” covers two very different financial tools. One converts a lump sum you already have into guaranteed income you can’t outlive. The other is a tax-deferred place to grow money you won’t touch for years. This calculator does both — and, just as importantly, shows you the honest trade-offs so you can decide whether an annuity belongs in your plan at all.
Income mode: turning a lump sum into a paycheck
A single-premium immediate annuity (SPIA) is the simplest annuity there is: you hand an insurer a lump sum, and they send you a check every month for the rest of your life. It is longevity insurance — protection against the risk of living longer than your money. The trade-off is real: you give up access to the principal in exchange for the guarantee. It tends to fit best for the slice of a portfolio you want to put on a guaranteed floor for essential spending, not the whole nest egg.
Accumulation mode: tax-deferred growth
A deferred fixed annuity (or MYGA) grows at a contractually credited rate, tax-deferred, until you withdraw or annuitize. The tax deferral is the real advantage over a taxable account. But the credited rate is bond-like, the gains are taxed as ordinary income on the way out, and surrender charges lock the money up. It is a conservative-sleeve tool, not a growth-sleeve one — and for most people, maxing tax-advantaged accounts first is the better move.
Run the numbers.
How this works: Income mode estimates a single-premium immediate annuity payout rate by age, gender, and payout type (current-environment approximation), then derives monthly/annual income and a nominal breakeven. It compares the guaranteed payout against a 4% “safe withdrawal” draw from the same sum left invested. Accumulation mode compounds the premium and any contributions at the credited rate, tax-deferred, and contrasts that with a taxable account whose gains are taxed annually at your marginal rate.
Compliance note: T&T Capital Management is an SEC-registered investment adviser. We are not insurance agents and this is not insurance advice. Payout and growth figures are illustrative approximations and will differ from any real carrier quote, which depends on the carrier, the rate environment, riders, and underwriting. Actual annuity selection and contract design must run through a licensed insurance professional. Annuities are not always the right answer; this tool is meant to inform that conversation, not recommend a product.
T&T Capital Management is an SEC-registered investment adviser. To talk with us about your specific situation, schedule a free consultation.