Annuity Payout Calculator
Summary
| Monthly Payout: | $0.00 |
Annuity Payout Calculator
This calculator can estimate the annuity payout amount for a fixed payout length or estimate the length that an annuity can last if supplied a fixed payout amount. Please use our Annuity Calculator to estimate the end balance of an annuity for the accumulation phase.
Qualified vs. Non-Qualified Annuities
Qualified
In the U.S., a tax-qualified annuity is one used for qualified, tax-advantaged retirement plans such as an IRA or 401(k). Less common qualified retirement plans include defined benefit pension plans, 403(b)s (similar to 401(k)s), Keogh Plans, Thrift Savings Plans (TSPs), and Simplified Employee Pensions (SEPs). Contributions to qualified annuities are generally paid with pretax money, including any investments purchased for use in a qualified retirement plan, and are not included in taxable income for the year in which they are paid. This means that contributions during a tax year can be deductible, lowering taxable income. However, the eventual distributions during a future tax year are subject to ordinary income taxes.
When used as a form of retirement savings, these annuities are entitled to the tax benefits and penalties of their respective plans. However, the rules of the annuity plan still govern all matters and may override certain rules. With that said, features that are unique to annuities such as guaranteed death benefits (benefits that must be paid out to beneficiaries regardless of factors such as down markets and decreases in account value) may still be included.
Non-Qualified
These annuities are purchased with after-tax dollars. In other words, the only portion of a non-qualified annuity policy that is eligible for taxation is the earnings, which are taxed as ordinary income. A big distinction to make is that, unlike qualified annuities, non-qualified annuities are not subject to minimum distribution rules after the age of 72. There is no limit on the amount of non-qualified money that can be placed into an annuity or the number of annuities that can be purchased.