Monthly Annuity Calculator: How Much Do You Need to Pay Yourself
How much do you need to pay yourself? How much will an annuity for lifetime income pay using our calculators? Both are great questions. And that's what today's topic is on because we're going to go through how to use the Annuity Calculators on this website.
Suppose you're looking for an annuity calculator to see what an annuity will pay you for life monthly, or if you're looking to calculate any annuity, we've built those calculators on this website. We don't charge for them, and no one will call you. From here, click on the Calculators tab, choose an option from the drop-down menu, enter your information, and see your results. It's fantastic!
Lifetime Income Strategies
Now, there are four types of lifetime income strategies: Single Premium Immediate Annuities, SPIAs, Deferred Income Annuities, DIAs, Qualified Longevity Annuity Contracts, QLACs, and then there are Income Riders that really aren't annuities but they're lifetime income benefit attachments that you can attach at the time of the policy typically to either variable or Fixed Index Annuities. I don't sell variable annuities because I don't sell anything that has the potential to go down in value, so we attach them to Fixed Index Annuities. What we found is that the Income Riders attached to Index Annuities typically provide a higher contractual guarantee most of the time when compared to variable annuities.
Let's talk about lifetime income. Lifetime income is primarily based on your life expectancy, or if it's joint, life expectancies at the time you take the payment. Interest rates play a secondary role, and you need to understand that interest rates don't drive the pricing train. It's life expectancy, and it's what they call mortality credits at the time you take the payment. You're pooling risk with all of the other people your age for that lifetime income stream. You can't time it. I know that you think you can, but you cannot. I got a call the other day, and he goes, "Well, I'm going to wait for about six to nine months before I buy my Immediate Annuity because I think rates are going up." I say, "Well, great. That's fine, Chester, but you need to factor in the nine payments you'll miss while you're waiting to become and prove that you're the master of the universe. And then you have to factor in how much time it will take to make up for that." The bottom line is you can't beat the life insurance company. Why? Because they know you're going to die, period. You can't beat them. If the guarantees make sense, they make sense.
Single Premium Immediate Annuities (SPIAs) were put on the planet during the Roman times as a gift for the dutiful Roman soldiers and their families as a pension type gift. On this site, we have SPIA and DIA calculators. DIAs, Deferred Income Annuities, are actually Immediate Annuities that defer. Once you get past the year, an Immediate Annuity becomes a Deferred Income Annuity. When you go to our Annuity Calculators, you can run them 24/7, 365 with no limitation. You're not going to get, "Well, that was your 86th quote. You can't do anymore." No, you can quote forever. You just put in your name and email when prompted. Why do you put in your email?
Because not only are you going to see the quote in real-time once you punch in all the information, we're going to email you that quote as well for you to look at later and put into whatever file you need to put into as you're making your decision on your terms and your timeframe. Then, you're going to put in your state of residence. I'm not going in sequence because I don't have that kind of brain, but I know what's on the screen because I help build it. Of course, I'm Stan The Annuity Man®, America's annuity agent®. After you put in your state, you put your date of birth. If it's joint, dates of birth. You then put in the type of account, IRA, Roth IRA, or non-IRA. You put in how long it's going to be until the income starts, 30 days a year, two years, whatever. Then click on Get Quote.
For the Deferred Income Annuity and the Single Premium Immediate Annuity calculator, there's a dropdown that says, choose your calculation. The first choice is I know how much monthly income I want to get (reverse engineer), or I know the dollar amount I might want to put in. That's pretty basic. Let's look at the first one. You're reverse-engineering the quote. Let me give an example. I had a call the other day, and the gentleman said, "I need $2,000 per month every single month for the rest of my life and my wife's life." Okay, great. We'll quote all carriers to see which carrier will guarantee that $2,000 per month using the least amount of money contractually to do that. That's a reverse engineer quote. I love that because I always tell people to say, "Use as little money as possible to solve for the contractual goal." But most people want to say, "Well, I've got $100,000 or $400,000 or $700,000 or $300,000. How much lifetime income will that create?" You get two choices: Single Premium Immediate Annuity and Deferred Income Annuity. And by the way, that same choice is also on the Income Rider quotes. It's not on Qualified Longevity Annuity Contracts because the IRS and the Department of the Treasury introduced that product, and that's a little messy, as they say. For the other types of lifetime income quotes, Income Rider quotes, Deferred Income Annuity quotes, and Single Premium Immediate Annuity quotes, you can do a reverse engineer solving for that monthly income amount. You can also solve for the lump sum. A lot of people say, "What's $100,000 pay? What will a million dollars pay? What will half a million dollars pay?" It depends on your life expectancy or life expectancies at the time you want to start the payment.
Now, I hear you saying, "What about inflation? My Social Security increases with inflation," well, kind of. That is the best inflation annuity on the planet. If you want to see a cost-of-living adjustment increase quote, you need to schedule a call with me. Why? Because I need to explain how that sausage is made. Now, it sounds great in theory for everyone to say, "Well, my annuity increases every single year forever. As long as you're breathing, every year it increases." That sounds great, but annuity companies have big buildings for a reason. They do not give that increase away. It's a very common but misleading pitch in the index annuity world, "If you buy this Index Annuity, it increases with inflation." No, no, no, no. What the annuity company does is lower that initial payment, say 25 to 40%, and they'll lower it to make up for that increase. That may not be a good deal. It can be in combination with other annuities that don't have that increase, but in most cases, it makes sense mathematically to buy that static. I know you're saying, "But how about hyperinflation? How about that?" No annuity on the planet, regardless of the sales pitch, can address it, period. The way to address inflation is when you need to solve for more lifetime income, you do a reverse-engineered quote, an Immediate Annuity reverse engineer quote, solving for that monthly income amount.
Let's talk about inflation broadly. Inflation affects all of us differently. For me, that has two grown daughters, and they're out of the house. We're not taking them to school anymore. We're not buying them the clothes, and we're not buying them the school supplies and all that stuff, and the grocery bill's going down. Inflation is affecting me and my wife, the lovely Christine, that has stayed with me for three decades for some reason. It affects us differently than if you have kids, etc. Inflation is the gorilla in the room, but factoring it in for your specific situation is customized based on your situation. And that's something that we need to talk about. When I put the calculators on the site, you can run them all day. We do not put inflation in there because it's a customized thing that you and I need to discuss. How much do you need to pay yourself? Where are the best monthly annuity calculators? Where can I see that? You know where, right here. Go there, and run the quotes. Look at the guarantees based on your life expectancy or life expectancies.
Never forget to live in reality, not the dream, with annuities and contractual guarantees! You can use our calculators, get all six of my books for free, and most importantly book a call with me so we can discuss what works best for your specific situation.