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Calculating Future Values Of Annuity For Retirement

For every retiree or intending retiree, it is important to understand the intricacies of purchased annuity for retirement purposes. This way, you will be convinced of the investments you are deciding upon and the value to be gained in the future. In addition to the details in this article, you will have the opportunity to compare rates from several annuity providers within our network of leading insurance companies.

FUTURE VALUES (FV) OF ANNUITIES

Future values of annuities tend to be the most important information sought after by retirees and other investors. It tells them how much to expect at a later date based on the amount that has been invested today. Future values will differ slightly for the two major types of annuities under consideration which are the “ordinary annuity” and “annuity due”. For ordinary annuities, payments are usually required at the end of each period which can be a month, a quarter or at the end of a year. The reverse is the case for “annuities due” where payments are required at the beginning of each corresponding period.

Though we have free and reliable calculators which can give the information required by just punching in figures, we wish to let you understand how it works in order to be able to negotiate the best deal in the absence of an online calculator. For instance, if you were paying interests on a particular loan, calculating the future value will help you to determine the actual cost of the loan.

FV CALCULATION

With FV calculation, let’s assume that you are investing $1000 at 5% interest rate in an ordinary annuity at the end of each period, and then you will have had a minimum of $5525 as your investment balance after five years. This is due to the compounding effect of the closing balance on a yearly basis.

With this, every retiree investor can quickly do a mental calculation of what their investments will be worth after a specific number of years. It should also be noted that the original principal will be interest free, giving you the ability to calculate the exact amount that you will receive as payout depending on the number of years agreed upon with the annuity plan provider.

We also have other types of calculators for different types of annuity for retirement. There are calculators available for annuity planning and also those that can be used to calculate the present value of an annuity.

To get started, enter your zip code on the top of this page, and then answer some basic questions. This will help you to compare annuity plans from multiple providers for FREE to determine your highest eligible rate. It is important to provide accurate questions to these answers as our pool of providers will provide you with different rates depending on your individual circumstance and situation.