Variable Annuity Calculator

With this variable annuity calculator, you can estimate how much your annuity could be worth when you decide to annuitize the contract. Calculating the growth of a variable annuity involves factors like the average rate of return and how long the annuity has to fluctuate in value before withdrawals begin.

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    Jennifer Schell

    Jennifer Schell

    Financial Writer

    Jennifer Schell is a professional writer focused on demystifying annuities and other financial topics including banking, financial advising and insurance. She is proud to be a member of the National Association for Fixed Annuities (NAFA) as well as the National Association of Insurance and Financial Advisors (NAIFA).

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    Savannah Pittle

    Senior Financial Editor

    Savannah Pittle is an accomplished writer, editor and content marketer. She joined as a financial editor in 2021 and uses her passion for educating readers on complex topics to guide visitors toward the path of financial literacy.

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    Thomas Brock, CFA®, CPA, is a financial professional with over 20 years of experience in investments, corporate finance and accounting. He currently oversees the investment operation for a $4 billion super-regional insurance carrier.

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  • Updated: August 21, 2023
  • 5 min read time
  • This page features 3 Cited Research Articles
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APA Schell, J. (2023, August 21). Variable Annuity Calculator. Retrieved June 20, 2024, from

MLA Schell, Jennifer. "Variable Annuity Calculator.", 21 Aug 2023,

Chicago Schell, Jennifer. "Variable Annuity Calculator." Last modified August 21, 2023.

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Contributing to a variable annuity creates long term tax-deferred growth. Use this calculator to see how a variable annuity might fit into your retirement plan.

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Information and interactive calculators are made available to you only as self-help tools for your independent use and are not intended to provide investment or tax advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

How To Use the Variable Annuity Calculator

You can use this variable annuity calculator to estimate your annuity’s future value simply by filling out the information required. You’ll provide details including your current age and tax rate, as well as the age and tax rate you’ll be at when you intend to start withdrawing from your annuity.

If you plan to continue contributing to your variable annuity throughout its term, you’ll enter into the calculator how much you expect to contribute each year. Additionally, you’ll tell the calculator the variable annuity’s starting balance and expected rate of return.

The calculator also considers how surrender charges could affect your annuity’s value.

If you’d like to factor in possible surrender charges, look up the variable annuity’s surrender charge schedule and enter the details into the calculator.

You’ll submit your variable annuity information by clicking the “Calculate” button. The calculator will then show you the expected value of your variable annuity when you begin withdrawals, assuming the average rate of return holds true.

This variable annuity calculator features a line graph that demonstrates how your annuity’s value could grow over the accumulation phase. The blue line represents your annuity’s value before taxes, while the green line represents the total amount of your annuity that is taxable income.

If you are struggling to make sense of the various types of annuities, some high-level guidance may be useful. Regarding risk exposure, fixed annuities are the safest, offering a fixed rate of return. Fixed-indexed annuities are potentially more lucrative, but can exhibit some volatility. Variable annuities are the riskiest type of annuity and can expose you to capital losses. That said, they offer the highest possible returns.

What Can a Variable Annuity Calculator Tell You?

The calculator can tell you an estimate of what your variable annuity could be worth when you reach retirement age and start withdrawals.

The calculator can also help you compare different variable annuity products. If you are looking at a few variable annuity options, you can plug in each product’s average rate of return and surrender charge schedule to see which annuity might be most beneficial for your financial plan.

What Are Surrender Charges for Variable Annuities?

Insurance companies apply a surrender charge to a variable annuity contract if the annuity owner withdraws money early. The charge is expressed as a percentage of the amount withdrawn.

The surrender charge is usually imposed during the first several years of an annuity contract, and the percentage that is charged declines each year. A variable annuity might charge a 9% penalty on funds withdrawn in the first year, an 8% penalty in the second year, a 7% penalty in the third year and so on.

When shopping for a variable annuity, it’s important to consider the surrender charge schedule even if you don’t plan on withdrawing money from your annuity early. Financial emergencies can happen, and you may end up having to take some money out even if you didn’t plan to. So, you should always be aware of possible surrender charges before purchasing an annuity.

The calculator above can run estimates of a variable annuity’s value with or without surrender charges. You may want to input your annuity details into both options and compare the results to better understand how surrender charges can impact your annuity’s value.

Limitations and Considerations

This variable annuity calculator has some limitations resulting from the assumptions it must make to estimate the value of a variable annuity. For example, the calculator assumes that the annuity’s returns are compounded annually and that any contributions are made at the beginning of each year.

The biggest assumption the calculator makes is that your variable annuity will earn a consistent average rate of return. By design, variable annuities do not earn the same rate of return year after year; if they did, they would be fixed annuities

Variable annuities change in value based on how the money in the annuity is invested. Because of this, the returns of a variable annuity are different each year; some years, the value of the annuity may even go down if market performance is poor.

This means that the future performance of a variable annuity can’t be predicted with certainty. The calculator above simply provides an estimate of the possible growth of a variable annuity if market conditions perform consistently.

The variable annuity calculator also does not factor in the various fees and expenses associated with variable annuities. This type of annuity has some of the most fees and expenses, including mortality and expense risk charges, surrender charges and subaccount management fees. These fees can total between 2.5% and 3% of the contract’s value.

A financial advisor can help you understand the benefits and drawbacks of variable annuities and decide whether this product is right for you. Consider speaking with a financial planning professional before purchasing a variable annuity.

Frequently Asked Questions

What is a variable annuity?

A variable annuity is an insurance product that accumulates value based on the performance of the portfolio that the annuity is invested in. When the annuity matures, the contract is converted into a lump-sum payout or stream of payments.

What affects a variable annuity’s performance?

A variable annuity’s performance is affected by the equity market because variable annuities participate in the market. If the investments in a variable annuity underperform, the annuity’s value will decrease; if the investments do well, the annuity’s value will increase.

What are the pros and cons of variable annuities?

The pros of variable annuities include tax-deferred growth, initial investment protection and higher return potential than fixed annuities. The cons of variable annuities include high fees, complex contracts and the lack of a guaranteed return.  

What is the best age to buy a variable annuity?

Investors between the ages of 50 to 55 are best suited to benefit from variable annuities because they have enough time to weather market downturns before the withdraw from the annuity in retirement.

Please seek the advice of a qualified professional before making financial decisions.
Last Modified: August 21, 2023

3 Cited Research Articles writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. Hicks, C. (2023, January 31). 17 Things You Need To Know About Annuities. Retrieved from
  2. CNN Money. (n.d.). What Is a Variable Annuity? Retrieved from
  3. Wells Fargo. (n.d.). Variable Annuity Fees. Retrieved from