What is the future value of an annuity?

Unlike a taxable account, a fixed annuity enjoys the benefits of tax deferral. In addition, many annuity companies offer a higher first year bonus rate. To be able to offer these higher rates companies typically require you to keep the funds invested for a period of time or suffer a surrender penalty for early withdrawal. Use this calculator to help determine your annuity value in a given year and compare it to a taxable savings account like a CD.

Savings and Assumptions

Initial balance or deposit ?

$

The amount already saved before any new contributions begin.

Annual savings amount ?

$

How much you plan to contribute each year.

Before tax return on taxable account ?

%

The expected annual return if the money were kept in a regular taxable account instead.

Table of Historic Rates of Return. Inflation 2.9%, U.S. Treasury Bills 3.3%, Long-term Government Bonds 5.0%, U.S. Large-Company Stocks 10.4%, and U.S. Small-Company Stocks 11.8%. Past performance is no guarantee of future results. Source: Ibbotson SBBI 1926-2024

Advanced options 3

Annual increase in contributions ?

%

How much you plan to raise your annual contribution each year.

Marginal tax bracket during deposit(s) ?

%

Your income tax rate while you are making contributions.

Table of Federal Income Brackets and Rates. Tax Rate For Single Filers For Married Individuals Filing Joint Returns For Heads of Households 10% $0 to $11,925 $0 to $23,850 $0 to $17,000 12% $11,925 to $48,475 $23,850 to $96,950 $17,000 to $64,850 22% $48,475 to $103,350 $96,950 to $206,700 $64,850 to $103,350 24% $103,350 to $197,300 $206,700 to $394,600 $103,350 to $197,300 32% $197,300 to $250,525 $394,600 to $501,050 $197,300 to $250,500 35% $250,525 to $626,350 $501,050 to $751,600 $250,500 to $626,350 37% $626,350 or more $751,600 or more $626,350 or more.

Marginal tax bracket at withdrawal ?

%

Your expected tax rate when the money is eventually withdrawn.

Table of Federal Income Brackets and Rates. Tax Rate For Single Filers For Married Individuals Filing Joint Returns For Heads of Households 10% $0 to $11,925 $0 to $23,850 $0 to $17,000 12% $11,925 to $48,475 $23,850 to $96,950 $17,000 to $64,850 22% $48,475 to $103,350 $96,950 to $206,700 $64,850 to $103,350 24% $103,350 to $197,300 $206,700 to $394,600 $103,350 to $197,300 32% $197,300 to $250,525 $394,600 to $501,050 $197,300 to $250,500 35% $250,525 to $626,350 $501,050 to $751,600 $250,500 to $626,350 37% $626,350 or more $751,600 or more $626,350 or more.

Annuity Information

Initial rate ?

%

The guaranteed rate the annuity pays for the introductory period.

Subsequent expected interest rate ?

%

The rate assumed after the initial guarantee period ends.

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Number of years initial rate is guaranteed ?

How long the introductory rate lasts before the rate can change.

Minimum guaranteed interest rate ?

%

The floor rate the annuity contract guarantees regardless of market conditions.

Years

Item	Surrender
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10

Up to 10 entries.

Enter your values and select Calculate.

The figures above compare two paths for the same money: a taxable account growing at your expected return, and an annuity growing under either its expected rate or its minimum guaranteed rate. The after-tax future value of the taxable account is the fairest number to set beside the annuity's surrender values, since it reflects what you would actually keep after the account is taxed.

Two inputs move these results the most: the before-tax return you assume for the taxable account, and the subsequent expected interest rate you assume for the annuity. Small changes to either one, especially compounded over many years, can shift the comparison meaningfully. The number of years and your annual contribution also matter, but the rate assumptions are usually where the real uncertainty lives.

None of these figures account for annuity fees or riders, changes in tax law, or how markets actually behave year to year rather than at a smooth average rate. The minimum guaranteed rate is a floor built into the contract, not a forecast, and the surrender values only matter if you expect to need the money before the surrender period ends.

It is worth rerunning this if your tax bracket changes, if you get a new rate quote on the annuity, or simply once a year as part of a broader review. Having a side-by-side estimate like this, even a rough one, puts you ahead of comparing products by feel alone — bring it to an advisor if the decision involves real money on the line.

This information may help you analyze your financial needs. It is based on information and assumptions provided by you regarding your goals, expectations and financial situation. The calculations do not infer that the company assumes any fiduciary duties. The calculations provided should not be construed as financial, legal or tax advice. In addition, such information should not be relied upon as the only source of information. This information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy. Hypothetical illustrations may provide historical or current performance information. Past performance does not guarantee nor indicate future results.