If you need warning msg disp, tot cash flow and periods count and you already have planned age to retire, remaining balance, amount to invest, expected inflation rate, payment amount, annuity starts from…, i’d like to know…, timing of withdrawals, var flow, var sub, var table, var time, var type, growth rate of withdrawals, periodic growth rate, m, withdrawal frequency, expected rate of return and length of withdrawal, this calculator does the substitution for you. It suits a quick check, a homework answer you want to confirm, or any figure you need to sanity test.
What Is the Immediate Annuity Calculator?
The immediate annuity calculator takes planned age to retire, remaining balance, amount to invest, expected inflation rate, payment amount, annuity starts from…, i’d like to know…, timing of withdrawals, var flow, var sub, var table, var time, var type, growth rate of withdrawals, periodic growth rate, m, withdrawal frequency, expected rate of return and length of withdrawal and turns them into warning msg disp, tot cash flow and periods count.
It is the kind of calculation you would otherwise do on the back of an envelope: mechanical, repeatable and easy to get subtly wrong without noticing.
How the Immediate Annuity Figure Is Built
Each result is calculated from the ones before it, so the working is fully visible. That matters when the answer is going to be quoted to somebody else and you need to be able to explain where it came from.
The figures are exactly as good as the assumptions underneath them. Check the rates, the periods and the tax treatment before you rely on the result.
Reading the Result Sensibly
A small change in an input can move the result by much more than you would expect, particularly where the calculation divides by one of the figures you supplied. That is worth understanding before you rely on a figure.
For anything that will be committed to, write the inputs down beside the result. A number you can reproduce is worth far more than one you cannot explain.
A Worked Example
Working through an example, with planned age to retire set to 10, remaining balance set to 5, amount to invest set to 2, the calculator returns periods of add the values above, and tot bal of 2, and eq p of 2,020. Substitute your own figures and the same steps produce the same kind of answer.
Frequently Asked Questions
What do I need to work out warning msg disp?
Enter planned age to retire, remaining balance, amount to invest, expected inflation rate, payment amount, annuity starts from…, i’d like to know…, timing of withdrawals, var flow, var sub, var table, var time, var type, growth rate of withdrawals, periodic growth rate, m, withdrawal frequency, expected rate of return and length of withdrawal. The calculator then works through the relationship and reports warning msg disp, tot cash flow and periods count.
What does the immediate annuity actually calculate?
It takes planned age to retire, remaining balance, amount to invest, expected inflation rate, payment amount, annuity starts from…, i’d like to know…, timing of withdrawals, var flow, var sub, var table, var time, var type, growth rate of withdrawals, periodic growth rate, m, withdrawal frequency, expected rate of return and length of withdrawal and converts them into warning msg disp, tot cash flow and periods count using the standard relationship for this problem. Each step is applied in turn, so every output is traceable back to the numbers you typed in.
How should I enter planned age to retire?
Use the value you actually have, in the unit shown next to the field. Enter every value in the same unit system. The calculator assumes the figures you supply are consistent, so it cannot correct a mistake that happens before the calculation starts.
Is the answer exact?
It is as exact as the formula and the inputs allow. The method itself is the standard one for this problem, so the only sources of error are the figures you enter and the precision you ask for.
Can I use this for a quick estimate as well as a precise answer?
Yes. The calculator is built for quick checks, so round your inputs to a sensible number of significant figures and the result will be just as useful. If you need more precision, keep the same method and add digits to the inputs rather than adjusting the method itself.