Understanding A Variable Annuity Calculator

Answer 1

In the United States, annuity contracts are regulated by the Internal Revenue Code and individual states. Annuities, which are a type of tax-deferred savings, are only distributed to individuals by life insurance companies in the United States. However, they may also be issued privately in contracts between donors and non-profit organizations. In such an exception, the reason is often to reduce taxes. Both features of life insurance and investment products comprise a variable annuity. Overall, an annuity must follow the IRC codes, but in the end, the individual state will add state-specific details and regulations. Variable annuities are also regulated by the Securities and Exchange Commission. Sale of these are governed by the regulations of FINRA, a large non-government regulator for U.S. securities firms.

Due to their dual composition, annuities can be confusing to most people who purchase them. In most cases, they are briefly explained in a way that seems to make sense. However, many people purchase them and find that there are even more confusing terms involved. Simply put, an annuity is much more complex than it seems on the surface. Calculating is one of the most difficult tasks for a holder of an annuity, unless he or she is fully educated in the matter or has experience actually selling them. Fortunately for consumers today, there are variable annuity calculators available online. These calculators are designed to put the many complex aspects into simple terms and let consumers know how much they can expect to pay on a variable annuity.

Calculators will ask for current age and withdrawal age, or the age at which a person expects to withdraw funds. The surrender amount is the amount the annuity holder is willing to give up to the financial institution holding the annuity for their profit. There must also be a contribution amount specified; this is the dollar amount the annuity holder plans to contribute to their account annually. The expected annual rate of return must also be noted; this is the amount expected to compound annually. Current tax rate, retirement tax rate and the number of years until planned retirement must be entered. The results will show annuity totals before and after taxes. For a good annuity calculator, use the free widget on Dinkytown.net.