Variable annuity calculator
Variable annuities are investment vehicles that allow your savings to grow tax-free until you begin making withdrawals. Use this calculator to see how a variable annuity could fit in your retirement income strategy, then connect with an Ameriprise financial advisor to learn more.
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Variable annuity inputs: |
Surrender charges |
Annuity Vs. Taxable Account |
Totals at Withdrawal |
Definitions
Variable annuity
A variable annuity is an insurance product designed to provide long-term, tax-deferred savings. You do not receive a tax deduction on the money you deposit, however, you pay no taxes until you begin making withdrawals. There are no annual contribution limits or income limits. A variable annuity could be a good option if you wish to increase your tax-deferred savings. This calculator assumes that you make your contribution at the beginning of each year.
Variable annuity contracts will have different rules, restrictions and expenses that will vary by insurance company and by product within an insurance company. To fully understand a variable annuity, make sure you fully understand all options, restrictions and expenses for your specific variable annuity before you enter into such a contract. This calculator is not designed to describe a specific insurance product and should be used as a general illustration of the tax-deferred feature of a variable annuity.
Starting balance
Initial amount to contribute to your annuity. The starting balance is assumed to be contributed immediately and beginning earning a return.
Surrender charges
Surrender charges are a percent of the annuity balance you will be charged if you withdraw your annuity balance early. The actual surrender charges vary widely from annuity to annuity. Make sure to check with your investment adviser if you are unsure of the surrender charges that may apply to your particular annuity.
Current age
Your current age.
Withdrawal age
Age you wish to start taking money out of the annuity. This calculator assumes that the year you begin withdrawals, you do not make any contributions to your annuity. For example, if you begin at age 65, your last contribution would have happened when you were actually age 64.
Annual contribution
The amount you will contribute to your variable annuity each year.
Expected rate of return
The annual rate of return you expect for your variable annuity. This calculator assumes that your return is compounded annually and your contributions are made at the beginning of each year. The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2023, had an annual compounded rate of return of 15.2%, including reinvestment of dividends. From January 1, 1970 to December 31st 2023, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.9% (source: www.spglobal.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
Insurance products may additionally include mortality, expense risk charges, cost of insurance, administrative, and surrender charges that will have a significant impact on the total rate of return for the investment.
Current tax rate
Your current marginal tax rate you expect to pay on your taxable investments. Use the ‘Filing Status and Federal Income Tax Rates on Taxable Income’ table to assist you in estimating your Federal tax rate.
| Tax Rate | Married Filing Jointly or Qualified Surviving Spouse | Single | Head of Household | Married Filing Separately |
|---|---|---|---|---|
| 10% | $0 - $23,200 | $0 - $11,600 | $0 - $16,550 | $0 - $11,600 |
| 12% | $23,200 - $94,300 | $11,600 - $47,150 | $16,550 - $63,100 | $11,600 - $47,150 |
| 22% | $94,300 - $201,050 | $47,150 - $100,525 | $63,100 - $100,500 | $47,150 - $100,525 |
| 24% | $201,050 - $383,900 | $100,525 - $191,950 | $100,500 - $191,950 | $100,525 - $191,950 |
| 32% | $383,900 - $487,450 | $191,950 - $243,725 | $191,950 - $243,700 | $191,950 - $243,725 |
| 35% | $487,450 - $731,200 | $243,725 - $609,350 | $243,700 - $609,350 | $243,725 - $365,600 |
| 37% | Over $731,200 | Over $609,350 | Over $609,350 | Over $365,600 |
| *Caution: Do not use these tax rate schedules to figure 2023 taxes. Use only to figure 2024 estimates. Source: Rev. Proc. 2023-34 | ||||
Retirement tax rate
The marginal tax rate you expect to pay on your investments at retirement.
Years until retirement
Number of years before retirement.
Annuity total before taxes
Total value of your variable annuity at retirement before taxes.
Annuity total after taxes
Total value of your variable annuity at retirement after taxes are paid.
Total taxable account
Total value of your savings, at retirement, if your annual contribution is deposited into a taxable account.
An Ameriprise financial advisor will help you determine if an annuity can help you achieve your financial goals.
Or, request an appointment online to speak with an advisor.
Background and qualification information is available at FINRA's BrokerCheck website.