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Questions tagged [annuity]

An annuity is a contract between you and an insurance company that requires the insurer to make payments to you, either immediately or in the future. You buy an annuity by making either a single payment or a series of payments. The payout may come either as one lump-sum payment or as a series of payments over time.

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Annuity vs Bond Returns

The way I understand it buying a simple term annuity from an insurance company is like depositing money in a account that earns fixed interest compounded for the duration of the annuity and taking out ...
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How do you calculate the rate in the present value of an annuity due calculation?

I have the formula for calculating the present value of an annuity due I have the Present value now, so I want to solve for r. In other words, I would like to find out the resultant rate. In the ...
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Future Value of Annuity Due with Different Percent Rate

Basically I understand how to solve a FVA problem if its just one static interests rate (%) and this is the Formula I use. But this table from Bank's Rate Table is confusing me on how to calculate ...
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AIG Single Premium Deferred Fixed Annuity

I would very much appreciate if someone could explain the "investment" benefits of a Single Premium Deferred Fixed Annuity. I know NOTHING about this type of investment plan, which my financial ...
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368 views

Minimum Required Nest Egg Formula?

As a follow-up to this question, what is the minimum size of a nest egg to support 30 years of $5,583.33 monthly distributions? I want the $5,583.33 to increase with inflation each month. The ...
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What is the meaning of the Mega-Million's Cash Option - Avoiding lottery's winning taxes

The current Mega Millions jackpot is standing on $868 Million USD, while the Cash Option for the same Jackpot is $494 Million USD. The winner of any of Mega Million's jackpot has two options to ...
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139 views

How can I predict future value of annuity given historical data points and using regression?

I have a retirement fund into which I make regular deposits, however the deposits vary to some extent in size. Furthermore, the growth of the account is also dependent on stock prices. I am tracking a ...
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471 views

Growing annuity where cash flow grows per second year

I'd like help with a formula for calculating Future Value given the following: An amount is invested at the END of every year, starting with amount of PMT at the end of this year, at an interest rate ...
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255 views

88 year old mother considering Fidelity & Guaranty Life FG Guarantee-Platinum 7 annuity (being pressured into)

My 88 year old mother is considering buying an annuity FG Guarantee-Platinum 7, single premium, fixed, deferred with 7 year guarantee of 4%. I was always under the impression that annuities of any ...
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236 views

Defined Benefit Lump Sum calculation

I have a Defined Benefit Pension Plan. I know how to calculate my monthly annuity (single life annuity), but can't figure out how the Lump Sum is calculated from the monthly annuity. I have been ...
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Are life annuity properties worth the risk for non-EU residents?

I am almost done paying off the mortgage of my principal residence, and I still have some good working years ahead of us. I wonder what I should do with the equity that I have accumulated over the ...
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Should I withdraw from my annuity now to invest elsewhere?

~8 years ago, when I was in my mid 20's, I wanted to start investing but had no clue what route to take. I researched a little and decided a Roth IRA would be the best place to start. A friend's uncle ...
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Young w/ pension plan: lump sum or annuity?

I've become fully vested in my company's pension plan, and I intend to quit in the near future to pursue other career options. It seems the pension scheme allows me to decide what to do with the ...
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Is this mixed annuity (part savings and part mutual fund) legitimate?

I heard about a type of annuity where some money is invested (I believe into the S&P 500) and other money is put into something like a CD. The contributor controls how much goes into the mutual ...
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Limits on Canadian gifting $400,000 to a friend in US

Friend recently passed leaving all her annuities to 91 yr. old sister in Canada who is very wealthy and does not need the money. The Canadian relatives who have power of attorney for the sister want ...
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Simple deferred annuity question [closed]

Your friend is considering investing $8,000 at the end of every quarter in a bank account paying 9% per annum. The first contribution will be made at the end of the first quarter. If interest is ...
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Rollover of 401k funds into an IRA

I am a 65 year old NON-US citizen, with an existing 401k based in the US. I am wanting to draw a monthly income from my "pot". Purchasing an annuity from insurance companies does not seem likely to ...
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108 views

Valuing a public sector pension

A common public sector pension structure in the UK is as follows You receive a payment each year from your pensionable age until you die. If you die before your partner, they receive a survivor ...
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Should I open a deferred annuity with my Roth IRA?

first post here... I want to open a Roth IRA with TIAA (I have a 403b with them). I have to fill out the paper form and additional forms since I am from NY. I was sent the Roth IRA enrollment form ...
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FV, FVA, PV, PVA

I am learning about simple time value of money equations and I was wondering If I see interest rate or inflation rate, can I use this value as the rate variable in all formulas? Can all the FV, FVA, ...
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Future Value of Annuity

Textbook: If you invest $2000 a year (at 9%) from ages 31 to 65, these funds will grow to $470,249 by age 65. ***the textbook did not say how they got this number, I just assumed it used FVA ...
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Why is the estimated monthly income state-dependent on CNNMoney's annuity calculator?

Why is the estimated monthly income state-dependent on CNNMoney's annuity calculator? Example: CA (376 USD) vs. IL (385 USD) Estimated monthly income: $376 Estimated monthly income: $385 I ...
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Back Door Roth Conversion eligibility

I would like to make back door Roth contributions, but I have 2 old SEP IRA annuities ( non-qualified) and I am currently drawing $5,000/year on a third small annuity that will continue until I am 69....
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Powerball Winnings: Annuity or Lump Sum [duplicate]

With the Powerball jackpot increasing once again, there's a renewed interest in playing, myself included. This got me thinking what I would do if I won, and so I looked at what past winners have done. ...
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What are the differences between an IRA and an annuity?

I'm currently working at a contract position with no 401k but want to save on my own until I'm either hired permanently or take a new position. Could you explain the differences between an annuity and ...
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Why would a life insurance exclude suicide for the first two years of policy duration only?

I'm currently reading terms for life insurance with survival benefit and investment. It's like you pay ten thousand USD each year and five years later you get back forty thousand USD (the four ...
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299 views

Fixed-Indexed Annuity Interest Calculation

I am considering a fixed S&P indexed Annuity that has monthly averaging. The monthly changes have an upper cap but negative changes are not limited. I believe this is typical of this type of ...
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471 views

$1.44 million in holdings: Help my non-retired, 80-year-old dad invest it [closed]

tl;dr   My 70'ish mother and 80-year-old, non-retired father have combined holdings of ~$1.44 million, haphazardly scattered over a number of instruments; help me help them design an ...
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Advice for opening an IRA as a newbie

Total IRA newbies! My wife and I each need to open an IRA before mid April to count for tax year 2016. I need to do this to offset some income I took from an inherited IRA. But I've never opened an ...
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118 views

Inherited Annuity Income

My father recently passed leaving a annuity to my brothers and me. I made a mistake of taking a full withdrawal without consulting a professional a month ago. It was had federal taxes withheld, but ...
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TI BA 2+ Annuity Calculation

What is the present value (or purchase price) of an annuity product which will pay you $2,500 at the end of each year for the next 14 years? Use a discount rate of 9.75%. My calculator (TI BA 2+) is ...
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481 views

What is the best source of funding to pay off debt?

I have 30K in CC debt that I would need to get out of. My options are: Cashing in a $60k annuity that doesn't return much, but has a penalty for withdrawal Borrowing from a $150k 401K (I don't want ...
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Computing initial required cash for retirement

I am trying to create a simple retirement calculator. My inputs are: annual income required during retirement (before inflation) inflation rate number of years of retirement yield on investment I ...
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Is National Pension Scheme(NPS) not a good investment?

NPS is a pension scheme in India. (Wikipedia says it is very close to 401(k) of USA). The basic outline of the scheme is as follows - NPS invests money in (E)quities (Max 50%), (C)orporate Bonds and (...
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Is a federal annuity taxable in Maryland?

My husband retired from Federal employment, and they didn't take out any Maryland state tax which I didn't notice. Now I'm worried about 2015 taxes which I haven't completed yet. Could this be that it'...
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Calculate time to reach investment goals given starting balance?

I'm sure this has already been asked, but I've had difficulty finding the answer by searching. Most investment formulas I've found explained don't include a starting balance. Given payment size, ...
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495 views

Calculating Annuities With Different Compounding Rate

I'm currently working on a homework problem where you lend a friend $40k and they pay you back in "6 equal annual installments commencing in exactly one year". What's tricky about this question is I ...
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When is it worth looking at charitable remainder trusts?

My alma mater, like many colleges and charities, offers the option for larger donations of setting up a charitable remainder trust. Basically, in exchange for your committing the donation while you're ...
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Retirement Options for Income

I am in the UK and hoping to retire in a few years. I am aware that pension rules have changed recently so an annuity is now not my main option for an income - due to my age annuity would only yield ...
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What is the relationship between the advertised and cash jackpots for Powerball (etc.)? [closed]

This question is asked at a time when the Powerball jackpot is at a record high and in the news a lot. Big jackpot games advertise their jackpot in terms of the amount that would be paid out in total ...
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Must an annuity provider payout a lump sum on an inherited annuity without charging fees?

I inherited 1/3 of an annuity account. Is it required for companies, if requested to payout lump sum on inherited annuity account and not charge fees?
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On a W4-P form, can I specify a withholding amount greater than the payment (due to early annuity withdrawal)?

This year, I did an early withdrawal from an annuity and the financial company withheld 10% for taxes--standard for an annuity in this circumstance. But I'll owe a lot more than that in taxes come ...
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Future Value of an annuity

If I pay 4 half-yearly installments in an investment scheme or I pay monthly installments of the same time (2 years). Interest rate in both cases is 9% compounded monthly. What will be my future value ...
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Possible to file W-4P “retroactively” for annuity early withdrawal?

I made an early withdrawal of $25,000 from an annuity account [no surrender fees] and, at the time, it was my understanding (based on conversations with the financial rep) that the taxes would be ...
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What are the formulas for these? [closed]

What are the formulas for the following? Overall increase given the percentages: a, b, c, d Future value of a one-time deposit given the amount of the one time deposit, APR, length of time, and ...
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1answer
281 views

Annuities-with deposits and withdrawals

A college education fund is to be accumulated by twenty level semi-annual deposits, the first due on Juanary 1, 1996. The fund is to provide 16 quarterly withdrawals of $ 1900 each, the first due on ...
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195 views

Retirement planning: Pension or personal saving/investing?

I work on short-term contracts that are well-paid - however, not knowing how long I will be working on a job, I have got into the habit of 'making hay while the sun shines' and saving what I can to ...
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641 views

Growing Annuity - How do I find the growth rate of a growing annuity?

I need help understanding the solution given for this problem. Some alternate ways to do the problem would be helpful as well. I need to find the growth rate of a growing annuity. Problem: Assume ...
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Paying off mortgage or invest in annuity

We are retired, I'm 62 and my husband is 58. We have $150,000 in savings, a 401K at $105,000 and another 401K of $75,000. The home mortgage has a balance of $160,000 with 18 years left on a 20 year ...
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Annuities and varying interest rates?

The gist: Let's say I have $12,000 and have $240 a week in which I can invest into an ordinary annuity. Let's say I invest $1040 a month as opposed to $240 a week. The interest rate is 3% p.a. ...