Immediate Annuity Calculator – Should You Get an Immediate Annuity?
Immediate Annuity Calculator
An annuity calculator can give you an idea of how much money you can get from investing in an annuity, which in turn, can help you decide whether or not it is the right investment option for you.
In order to provide you with a reliable estimate, though, you have to submit some important information, one of which is the type of annuity you are considering.
In fact, there are specific calculators for certain types of annuities so you should decide which annuity you want first and then look for a calculator that is designed just for it. For example, if you are considering an immediate annuity, then you should look for an immediate annuity calculator.
What is an Immediate Annuity?
Annuities come in various types according to various criteria. They can be fixed or variable, depending on the level of the rates, and they can also be single or joint-life.
Depending on when the annuity payments begin, an annuity can be immediate or deferred. With an immediate annuity, as implied, the payment, or at least, as soon as possible according to the annuity policy, while the payments of a deferred annuity begin at a pre-agreed date in the future.
To understand this better, you have to know that an annuity has three phases – the purchase phase, the accumulation phase, and the pay-out or liquidation phase.
The purchase phase is basically when the annuity is bought or when the investor makes contributions to it. The accumulation phase is when those contributions or funds are invested and the liquidation phase is when the investor receives returns for this investment.
Basically, with an immediate annuity, there is no accumulation phase, which can take years. Rather, it skips on to the liquidation phase.
Should You Get An Immediate Annuity?
An immediate annuity best benefits investors who:
a) want just a steady lifetime income, not wealth, or
b) want to receive their payments as soon as possible to cover certain expenses.
If you fit into one of the following categories, then you should talk to a financial adviser about getting an immediate annuity. A financial adviser can help explain how this type of annuity works in detail and help you decide if it best suits your financial circumstances.
You can also use an immediate annuity calculator to help you find out about how much you can get from investing in an immediate annuity and whether or not the amount is truly enough to cover your needs for the rest of your life.
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