Variable Annuity Calculator
How can a variable annuity help you save for retirement? Use this calculator to find out.
How the variable annuity calculator works
It grows your premium at the market return you expect, and again at that return minus the annuity’s annual fees, then takes the difference. Because fees are charged on the whole balance every year, the drag compounds.
Worked example: with initial premium of $100,000, annual return (before fees) of 7.00% and annual fees (m&e + fund) of 2.00%, the variable annuity calculator shows value after fees of $207,893.
- Value with no fees
- $275,903
- Value after fees
- $207,893
- Lost to fees
- $68,010
- Net return
- 5.00%
The formula
Value after fees = premium × (1 + return − fees)^years; fee drag = value at the gross return − value after fees.
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender, plan administrator or advisor.
Questions about the variable annuity calculator
Why are variable annuity fees so high?
They stack mortality & expense charges, administrative fees and underlying fund costs — often 2% or more a year. Charged on your entire balance, they compound heavily over time.
Are variable annuities a good investment?
They offer tax-deferred, market-linked growth and optional guarantees, but the fees are steep. For many, low-cost index funds in a retirement account achieve more for less.
How is a variable annuity taxed?
Growth is tax-deferred; withdrawals of earnings are taxed as ordinary income, and there is no step-up in basis at death — a drawback versus taxable investments.
Is the Variable Annuity Calculator free to use?
Yes. Every calculator on FinCalculators is completely free, with no sign-up, login or paywall. You can run as many scenarios as you like.