An annuity is an investment that offers earnings in trade for a one-time lump sum payment. An annuity calculator can estimate how much money you can expect monthly from things like pension schemes and others. It is a way of knowing your monetary growth based on your regular deposits.

But before you know what you can expect out of an annuity calculator, it is essential to understand the different types of annuities.

Types of Annuities

Annuities in India are often related to post-retirement income and help to secure their future. There are different kinds of annuities available that an individual can choose by their requirements:

1. Lump Sum

This kind of annuity option is generally optional and only available for a limited time. However, it is the most common and, as the name says, provides a lump-sum payment option to its investors. An important thing to remember is the investors in this option may only get the opportunity to withdraw part of the annuity amount in one go.

2. Periodic

You will get annuity returns regularly in this kind of annuity. In most cases, the payments can be made periodically, such as monthly and around the end of the 5th, 10th, etc. 

3. Immediate

As the name says, it's an annuity in which an investor gets almost immediate results. In such allowances, an investor pays a lump-sum amount and receives a direct payment after the lump-sum payment is made.

4. Deferred

Deferred is the opposite of immediate annuity. In this annuity, the investor will pay the premium for a specific period called the accumulation phase. Once the accumulation phase is completed, you can use the accumulated amount to purchase an annuity paid regularly after retirement.

5. Fixed

Fixed means the payout remains fixed and permanent for the complete tenure. It is similar to the constant monthly pension option and is excellent for people who want a steady and regular income. Although the payouts are consistent and fixed in a fixed annuity, there are fewer chances of capital gain.

6. Variable

People who like to take risks can go for variable annuity options. It is the annuity in which people link their investments with market-linked options for higher returns. However, it also means that the return and the payout will depend entirely on the market conditions and will not be stable or fixed.

What is the Taxation on an Annuity?

Since it is an income people will receive post-retirement, the government has taxed it - the tax slabs depend on the income earned and the investor's age. Also, if an investor wishes to withdraw the annuity before the retirement age, there is an additional tax that they may have to pay.

Results of Annuity Calculator

With the help of an annuity calculator, you can calculate your income from different investments over a specific period. You will be required to provide information such as income, demography, current savings, expenses, inflation rate, and expected rate of return to calculate and give you the results. 

Once you enter the above information, you will be able to get the below-mentioned results:

  1. Your total retirement amount.
  2. The future value of your savings, if applicable.
  3. And additional protection that may be required.
  4. The entire period or the number of years the investment will generate the payment and at the specified returns.


An annuity calculator is a perfect way to check the amount you can make post-retirement from your different annuity investments. Your payout may be fixed or variable, depending on the type of annuity you choose. So, choose an allowance as per your requirements.