Life annuities for retirement income, particularly fixed immediate annuities, continue to intrigue me. Every day it seems that one or members of the insurance industry comes out with a new and different annuity product for baby boomers to consider.
My preference is to learn as much about investment and income products on my own, without facing pressure applied by people trying to sell me something. I have nothing against folks who sell annuities in general. I just feel that I can make a better decision about relative costs and benefits associated with financial products if I gather many of the facts on my own.
The Need for Online Annuity Calculators
< To me, the most critical data for an immediate annuity that provides income for life is the cost per dollar received. Moreover, I want the ability to compare that cost factor at different ages and purchase dates relative to age. That’s where an online annuity a calculator can really help. So, I decided to look around the Internet for different sources of online tools for evaluating the costs of different life annuities. In this post, I will briefly summarize what I found.
Online Annuity Calculators
Perhaps the most prominent site featuring life annuities is ImmediateAnnuities.com. I have visited it numerous times, to gather information and run numbers on different income annuity scenarios. The calculator on this site is basic but effective. You enter your state, age, and gender, then either a desired income payment or fixed investment amount. For a joint life annuity, you have the option of entering your spouse’s age and gender. The output includes data for 11 different types of fixed and life annuities.
DinkyTown is a site with almost every type of financial calculator you can think of. It has two annuity calculators, one labeled for “immediate annuities” and the other for “fixed annuities.” Neither is as easy to use as some of the others. For example, the immediate annuity calculator asks you to estimate your life expectancy. I would skip this one in favor of some of the others.
The AARP licenses the other DinkyTown annuity calculator.
Banksite.com has an annuity contribution calculator. This helps you determine how much money you need to put away tax deferred to accumulate a certain amount in the future, and how much you could expect to withdraw. Too complicated for me.
The Fidelity annuity calculator also requires entry of a lot more data. I think Fidelity does this because it helps them sell the user on something. Not worth a visit in my opinion.
The Vanguard annuity calculator has lots of things going for it. You can enter a little or a lot of information depending on what you are looking for. It also gives you an immediate premium or payout quote which presumably is accurate for its own products. The different payout options are helpful if you don’t want an annuity that pays lifetime income.
The New Retirement lifetime annuity calculator is similar to the others in the type of information that you enter. One nice and unique feature is that different payout options are displayed all at once for the same premium payment. This makes it very user friendly.
Final Thoughts on Life Annuity Calculators
If you are serious about shopping for retirement income annuities, visits to each of these calculator sites is probably worth your time.
If you want the best of the lot, I would use the Vanguard and Immediate Annuities calculators.
Good luck in your search for an affordable annuity product.
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