Calculate Your Variable Annuity with Surrender Charges

Use this calculator to estimate how much your variable annuity will be worth at retirement and see how it will fit your retirement plans.

The resulting report will also show you how your annuity’s tax-deferred growth compares to taxable accounts, your balances by year, and how surrender fees will affect the total rate of return for your investment.

Used terms defined:

For more information about how annuities work, their risks, taxation, fees and etc. read Annuities Explained.

If you need to know more about the differences, pros and cons of fixed annuities vs. variable ones, go to the guide Fixed vs. Variable Annuities.

Variable annuity

Variable annuities are insurance contracts, under which the growth of your investment earnings is tax-deferred until the point you make withdrawals. From that point on gains are taxed at ordinary income rates.

Additionally, typically there is a "surrender period", during which if you decide to sell or withdraw money from your variable annuity you will have to pay a "surrender charge".

Note that our calculator assumes that your annual contributions are made at the beginning of the year.

Surrender charges

As explained above, if you decide to withdraw your annuity balance earlier you will be charged a certain fee, called "surrender fee" or "surrender charge". It is different for different insurers (can vary greatly) and it is charged as a percentage of your balance.

Starting balance

The amount you contribute at the very beginning to your annuity.

Current age

Your age at the beginning of contributing to a variable annuity.

Withdrawal age

Your age at which you plan to start withdrawing funds from your annuity.

Note that our calculator assumes that you do not make contributions during that year and the following years.

Annual contribution

The money you plan to contribute every year.

Expected rate of return

The expected annual rate of return for your annuity.

Of course, this number is hypothetical and the actual return of investment will vary through the years. It is important to understand that variable annuities may provide higher earnings compared to fixed annuities and other conservative investments, but they present higher risk as well (including the possibility of losing the principal on your investment).

Note that our calculator assumes that the return is compounded annually. Also it does not take into account any initial fees that companies may charge to begin your investment. In addition to that, your insurance company may also include administrative, mortality, expense risk, and other charges that are not taken into account in the calculations.

Current tax rate

The tax rate that may be paid on your taxable investments.

Retirement tax rate

The tax rate that is expected to be paid on your investments at retirement.

Annuity total before taxes

How much your variable annuity will be worth at your retirement before taxes.

Annuity total after taxes

How much your variable annuity will be worth at your retirement but after taxes are paid.

Total taxable account

How much your investment would be worth if you had put it into a taxable account.

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