Calculating Your Annuity Payments

Annuity payments and provide a security force that was when he or she no longer works. It is a livelihood for a retirement years ahead of periodic payments. Can also be seen as an investment vehicle for retirement, especially if you want to make the most of it . But a full understanding of how it can work to your advantage can help you plan your future and that of their children. Here are some tips on how to calculate the estimated future revenues :

1 . Identify the type of annuity you want to receive. Annuities are of two types: fixed and variable. A fixed annuity generates a certain amount and the fixed compensation , while a variable depends on market outcomes . For the payment of the annuity can be immediate or deferred , that is, you can delay payment for a while or you can already tell that after your first contribution.

2 . Select the amount of the annuity. The most common option is to pay the full amount of the pension to be granted to the applicant and the rest to the beneficiary after the death of the first . Another option is to allow the spouse 's pension and income as benefits for the rest of your life, or a combination of the other two options.

3 . Identify the most important details of an annuity , your interest and the balance of principal. Note however that the resulting amount of payments that vary depending on the conditions of the chosen annuity payment options . In general , the formula is :

Value of the annuity payment amount = current value of x an annuity factor ( PVAO ) .

You can get a copy or copies of a factor table ( PVAO ) with your agent or insurance company . It can also be accessed on the web.

4 . Now, if the annuity payment does not start in the next two years , you can adjust the calculation to determine the future value of your current balance principle . A figure of future value can be obtained from your insurance provider or online. Basically , it calculates the amount of your pension and the interest rate you will receive over a period of several years , until it begins to receive payments . If you want to know the monthly payments, you can simply divide the interest rate of 12 times and 12.