# Deferred Annuity Calculator

URL: https://speedycalculator.com/calculators/finance/deferred-annuity/
Last updated: 2026-10-25

> The deferred annuity calculator works out the balance of a deferred annuity at the end of the accumulation phase – from a lump sum and regular contributions – and the regular income it then pays over the withdrawal period.

## Inputs

- Initial lump sum
- Monthly contribution
- Annual return during accumulation (%)
- Years deferred
- Withdrawal period (years)
- Annual return during payout (%)
- Withdrawal frequency

## Results

- Balance at the first withdrawal
- Total contributions
- Growth during accumulation
- Withdrawal per period
- Total withdrawals
- Interest earned during payout

## Formula

```
Balance at start of payout = lump sum × (1 + i)^n + contribution × ((1 + i)^n − 1) ÷ i
Withdrawal = pmt(payout rate per period, payout periods, balance)
```

## Explanation

A deferred annuity grows tax-deferred until you start withdrawals. Fees and surrender charges vary widely; compare the net return with alternatives like an IRA or 401(k).

### How to use the Deferred Annuity Calculator

- **Initial lump sum**
- **Monthly contribution**
- **Annual return during accumulation**
- **Years deferred**
- **Withdrawal period**
- **Annual return during payout**
- **Withdrawal frequency**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the lump sum, monthly contribution, return during accumulation, years deferred, the withdrawal period and the return during payout.

### Tips

- Start early – time does more of the work than the amount you save.
- Take the full employer match if your plan offers one.
- Plan with a cautious return (4–6% after inflation) and check again every year.
- Know the contribution limits and required minimum distribution rules for your accounts.

### Common mistakes to avoid

- Ignoring inflation when setting a retirement target.
- Underestimating how long retirement can last.
- Withdrawing early and paying penalties and taxes.

### Inputs explained

FieldWhat to enterInitial lump sumAmount in your currencyMonthly contributionAmount in your currencyAnnual return during accumulationIn %Years deferredA numberWithdrawal periodIn yearsAnnual return during payoutIn %Withdrawal frequencyChoose one: Monthly, Semi-monthly, Bi-weekly, Weekly …

### What each result means

- **Balance at the first withdrawal** = fvc([Annual return during accumulation]÷1200, [Years deferred]×12, [Initial lump sum], [Monthly contribution])
- **Total contributions** = [Initial lump sum] + [Monthly contribution]×[Years deferred]×12
- **Growth during accumulation** = [Balance at the first withdrawal] - [Total contributions]
- **Withdrawal per period** = pmt(perr([Annual return during payout]÷100, 12, [Withdrawal frequency]), [Withdrawal period]×[Withdrawal frequency], [Balance at the first withdrawal])
- **Total withdrawals** = [Withdrawal per period]×[Withdrawal period]×[Withdrawal frequency]
- **Interest earned during payout** = [Total withdrawals] - [Balance at the first withdrawal]

### Example values

How the main result changes when **Initial lump sum** changes and everything else stays at the example values above:

Initial lump sumWithdrawal per period25,000900.4737,5001,086.3750,0001,272.2662,5001,458.1575,0001,644.04100,0002,015.82

## Worked example

Inputs — Initial lump sum: $50,000; Monthly contribution: $300; Annual return during accumulation: 6 %; Years deferred: 15; Withdrawal period: 20 years; Annual return during payout: 4 %; Withdrawal frequency: Monthly.

Results — Balance at the first withdrawal = $209,950.29; Total contributions = $104,000.00; Growth during accumulation = $105,950.29; **Withdrawal per period = $1,272.26**; Total withdrawals = $305,341.79; Interest earned during payout = $95,391.50.

## FAQ

**What is a deferred annuity?**
An annuity where payouts begin at a future date.

**Is a deferred annuity tax-deferred?**
Yes – gains are taxed when withdrawn.

**What are surrender charges?**
Fees for withdrawing early, often 5–7% declining over several years.

**What formula does the Deferred Annuity Calculator use?**
Balance at start of payout = lump sum × (1 + i)^n + contribution × ((1 + i)^n − 1) ÷ i.


## Sources

- [FINRA – Deferred variable annuities](https://www.finra.org/investors/insights/deferred-variable-annuities)