I've told ESPlanner I plan on converting half of my assets to an immediate annuity. My question is: How does the software calculate how much the annuity will pay? Don't current interest rates and other ecomomic variables affect what the payment of the annuity will be at purchase time?
Thanks in advance,
Disclaimer: ESPlannerBASIC, ESPlanner, ESPlannerPLUS and ESPlannerPRO, are educational calculators designed to give users input in mapping out financial futures, but should not be acted upon as a complete financial plan. The creators of these programs are not certified, registered, authorized, or any other type of financial planners. These programs are simply tools for helping you think through economic futures. Its "recommendations" should be viewed as informative inputs into your own decision-making with respect to saving and the purchase of life insurance. ESPlannerBASIC, ESPlanner, ESPlannerPLUS and ESPlannerPRO provide neither economic, financial nor tax advice, which can only be delivered to you by authorized professionals.
RSS
The program uses an actuarial calculation that takes into account survival probabilities, the load on the annuity, and the interest specified on the choice of annuity screen. best, Larry
How would one determine the load and rate? I'm getting quotes from Vanguard but load and rate aren't transparent. Is their a way to find out what's typical in the current economic environment so I can get more accurate results from ESPlanner?
Thanks in advance.
Hi, First, I'd try elmannuity.com for annuity quotes for inflation-indexed annuities from the Principal Insurance Co. The Vanguard annuities are written by AIG, which I wouldn't trust down the pike.
Second, you can adjust the load assumption so that the program internally generates an annuity similar in size to that being quoted to you.
best, Larry