Fixed Annuity Growth Calculator
A fixed annuity — most cleanly, a multi-year guaranteed annuity (MYGA) — compounds at a locked rate with no tax due until you withdraw. This calculator projects the balance over the term and puts the tax-deferral advantage next to a taxable CD at the same rate.
Assumes no withdrawals during the term (early withdrawals can trigger surrender charges, a market value adjustment, and a 10% IRS penalty before 59½). Annuity gains are taxed as ordinary income when withdrawn.
Illustrative only, based on the assumptions you enter — not a quote, an offer, or financial advice. Rates and rules change; verify current figures with a licensed professional before acting.
How this calculator works
The annuity side compounds the full rate untaxed and pays ordinary income tax on the gain at the end. The CD side taxes each year’s interest as it is earned, so it compounds at an after-tax rate. The gap between them is the value of deferral — it grows with the rate, the term, and your bracket.
The comparison assumes you hold to the end of the term. Surrender charges and possibly a market value adjustment apply to early withdrawals, and gains withdrawn before age 59½ generally face a 10% IRS penalty on top of income tax.
A CD is FDIC-insured; an annuity is backed by the insurer and, behind that, your state guaranty association within limits. Same math, different guarantees — check the insurer’s ratings before locking a multi-year term.
Frequently asked questions
What rates do MYGAs pay?
Rates track bond yields and change constantly, and differ by term, insurer, and features. We deliberately do not publish "current" rates — get live quotes and run them through the calculator.
What happens at the end of the guarantee term?
Typically a short window to withdraw or exchange penalty-free before the contract renews at a new rate. A 1035 exchange can move the money to another annuity without triggering tax.
Is the tax deferral worth it inside an IRA?
An IRA is already tax-deferred, so the annuity adds no extra tax shelter there — inside an IRA, buy an annuity only for its guarantees, not its tax treatment.
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This tool is for general education only and is not financial, tax, or legal advice. Results are illustrations based on your inputs — not quotes or guarantees. Consult a licensed professional before making decisions about annuities, settlements, or retirement accounts.