Use the Annuity Calculator to calculate the return on investment of a lump sum with regular monthly contributions. The Annuity Calculator is ideal for calculation return based on pension investments to understand the total value of your pension in the future and the interest gained on your pension savings.
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How does it sound to have an investment that can assure you an income for a lifetime? Yes, for a lifetime, it is possible and Annuity can be the vehicle for that. You can choose a plan that suits you and fix an age at which you would like to receive your income. Annuity is a great way to invest in your future with your pension pot. However, since investments are made into the stock market certain risks are also involved.
There are nuances in the tax laws around the world surrounding annuities with countries adopting slightly different policies depending on their political perspective of pensions, retirement age and working after the retirement age. For example, in the UK you can take up to 25% of your pension pot tax free. However, you pay tax on the income generated by the annuity. When you take 25% lump sum tax free cash it becomes mandatory to use the rest 75% to buy an annuity (or any other pension options). Let's explore this in more detail.
Pension pot refers to the total amount that you (and/or your employer) have contributed over the years to save for your retirement. This also includes any capital gains you might have received on this amount. You can either check this amount on the annual statements sent by your service provider or in many cases online on their website.
You are free to use your pension pot as you wish. However, to withdraw the money you should have reached a minimum age set by your pension organization. This age is usually 55. Pension pot funds can also be withdrawn in some special cases, also set by the pension organization.
When you choose an annuity you are required to:
All this may look difficult but if you have an online calculator to calculate annuity, it's a cakewalk indeed. The Annuity Calculator by iCalculator is here to make these calculations quick and easy for you. Just input the above details along with expected rate to check the tentative returns.
There are various types of annuities offered by different financial institutions.
Though investing in annuity is quite useful, there are few things that we should consider:
At the end we can say that annuity is a great way to secure your future, but it always pays to shop around a little to get the best deal available with the best return on investment. Though there are many service providers out there this is quite possible that your current pension provider has a perfect annuity plan for you. Check, calculate and compare before you make the final decision.
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