With the Right Provider, the Annuity Formula Could be Your Ticket to Income Stability at Any Age

If you’ve been thinking about your retirement years or your current form of employment compensates you in less-than-regular intervals, an annuity could be the answer to your income stability needs.

When a person chooses to invest a sum of money into an annuity, they have the peace of mind that comes from knowing that, at a later date, they will receive regular payments from the annuity. Due to the fact that the money you deposit for an annuity is invested by the provider, the amount of money is allowed to grow and an annuity formula is used to calculate the amount of money which you or your beneficiary will receive in payouts.

While it’s best to learn about the specific annuity formula used by a particular provider, you can get a rough idea as to how the annuity formula is broken down and the amount of money you would expect to receive, from the following:

Whatever amount you decide to deposit will have bearing on the amount of money you receive in regular payments later on. An investment of $150,000 will lead to payments much larger than if you were to invest $50,000, for instance.

An annuity term will be determined either by a person’s life expectancy (based on their age, gender and health condition) or the duration of time they selected, which is also known as a term certain annuity.

The money you deposit is invested by the annuity provider so the rate of return is that which is earned from the investment.

The annuity formula also takes into consideration the time or frequency with which payments will be made to the annuitant.

If you choose a fixed or variable annuity will also go into the annuity formula to determine your payment size.

Understanding the annuity formula will give you a better idea as to whether or not this is the type of financial investment you’re interested in making. For more information or to purchase an annuity, contact a licensed representative.