Purchasing an annuity with your life savings is a way to guarantee your life savings will last the rest of your life. But how long will that be? How long will you live? That’s what annuity calculators will tell you as well as how much money you will have each month (or year) for the remainder of your years.
For a super-fast (and therefore less accurate) estimate of your monthly income, check out CNN’s annuity calculator. It fast, simple, easy to use and provides very ballpark estimates of how much an annuity will bring you.
This calculator offers great flexibility for the user. It allows you to adjust the variables like the purchase price, monthly payout and growth rate and see how that impacts the other variables. However, it does not have a built in life expectancy based on your age. Instead, it leaves that factor for the user to input by using the phrase “Length of Annuity” instead of “Life Expectancy”. While flexible, this calculator may be confusing for persons unfamiliar with annuity jargon.
The financial services company, Fidelity, offers a version of an annuity calculator called the “Guaranteed Income Estimator”. The calculator holds the user’s hands and guides them through the process with intuitive questions. While the data input process is easy, understanding the results is complicated. Their calculator overwhelms with information, much of which will not make sense to the lay person.
Finally, this is not an annuity calculator but a well-written article that provides a contrarian viewpoint on annuities. Well worth reading for anyone interested. While there are many financially sound reasons for purchasing an annuity, this article helps to explain those reasons which are not sound and the shortcoming of annuity calculators.