subject: Annuity Calculator - Calculating The Future [print this page] The present day market is like a fair filled with myriad of opportunities to live life the way an individual desires. Living a life with convenience and dignity is what most individuals desire. As long as an individual is earning attaining and maintaining that does not seem to be that big a problem. The lines gather on the forehead only after one retires. When their is no longer a regular source of income, life suddenly becomes a heavy burden. The possibilities of having the life of one's choice seems to be bleak. With the advent of annuity schemes and annuity calculator the scenario has undergone a drastic change. One of the good annuity options is deferred annuity.
Annuity has different categories. They are namely, immediate annuity and deferred annuity. The different types of annuities have different schemes. The deferred annuity is mostly preferred due to the fact that it allows one opting for the scheme to delay the payment date of the periodic payment. In case of this kind of annuity the date from which the payment will start is predetermined between the individual in concern and the insurance company. This system consists of two phases. They are firstly the phase of investment and secondly the phase of income. In the first phase the individual in concern invests into his annuity scheme gradually as per the stipulated time period. The date when the payment starts has the flexibility of being reset. The individual in concern can decide whether the amount he or she is entitled to get should be given to him or her as a total or as a constant source of income payable monthly.
Deferred annuity also helps in saving tax. That is to say that the amount one invests in the deferred annuity gets tax exemption. This holds true only till the amount is not withdrawn. Annuity calculator on the other hand helps the individual in concern to get a fair idea of the sum of money his or her initial investment will amount to. This helps the individual in investing more prudently as per the requirements.
Annuity calculator takes into account a few things before determining the amount. The factors that come into play are the time period that the annuity will be paid off, the rate of interest for the annuity in concern, the rate of interest of a pay period and the number of pay periods. The formula used to calculate by the annuity calculator is primarily based on the effect of time on the money involved and of course financial principles. The formula also varies depending on the form of annuity. An individual need not necessarily go to a broker in order to know the future evaluation of his or her present investment. It can be done by the individual as well.
The things that the individual using the annuity calculator should consider are his or her age. As the amount of income is directly proportional to the age. The lesser the life expectancy the greater is the amount derived. Another criteria is that of the health condition of the individual. Having a satisfactory idea about the annuity amount now, one is ready to decide whether to opt for it or not.
