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An immediate annuity is a product sold by insurance companies that is designed to provide you with an income stream for life. The income, by definition, is designed to start immediately - although some immediate annuities allow you to defer payments for up to one year. It is very important to remember that once you setup an immediate annuity, you no longer control the money you put in it. Likewise, while the income stream is guaranteed for your lifetime, an untimely death will not result in any money being returned to your estate. This calculator is designed to help you estimate your monthly payments from an immediate annuity.
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Definitions
- Amount to invest
- The amount you wish to invest in your immediate annuity.
- Your life expectancy
- The number of years you expect to live and receive payments.
- Annual rate of return
- The annual rate of return for the immediate annuity.
- Frequency of payments
- How often payments are made to you from the immediate annuity. Options include monthly, quarterly and annually. This calculator assumes that your distribution occurs at the beginning of each period.
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