Free variable annuity calculator
Project the level monthly income a variable annuity premium could produce at an assumed return — then lower the rate to see how fees and a weak market cut into it, because nothing here is guaranteed, updated live, as you type.
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Estimates only, based on the values you enter. Not financial advice.
Results are estimates. Consult a professional.
What is a variable annuity?
A variable annuity is an insurance contract whose value rises and falls with investments you choose inside it, called sub-accounts. Unlike a fixed annuity, nothing is guaranteed: your money is invested in portfolios of stocks, bonds, or money-market funds, so the balance — and the income it can later produce — varies with the market. That is the trade the name describes: the chance of higher growth in exchange for the risk of loss. This variable annuity calculator estimates the level monthly income a premium could produce, using a single assumed return rate you supply.
Place it against its siblings: a fixed annuity credits a guaranteed rate with no market risk, and an immediate annuity converts a lump sum into income that starts at once. A variable annuity is the only one of the three where your principal can shrink, because you — not the insurer — bear the investment risk.
SEC Investor.gov: a variable annuity's value varies based on the performance of underlying investment options, and you can lose money — it is a security regulated by the SEC and FINRA.How the variable annuity calculator works — and what it leaves out
This calculator uses one assumed annual return to convert your premium into a level monthly income over the payout period — the same payout math used for a fixed or immediate annuity. It is a simplified projection: it does not model market ups and downs, and it does not subtract the fees a real variable annuity charges. Read the result as one scenario at one constant return, not a guarantee.
Fees and market risk: what makes variable annuities different
Variable annuities are among the most expensive retirement products, and the fees come directly out of your return. Because this calculator uses your gross assumed rate, you should mentally subtract these costs to judge the real outcome.
| Fee | What it covers | Typical range |
|---|---|---|
| Mortality & expense (M&E) risk charge | Insurance guarantees and the insurer's costs | ~1.0%–1.5% / yr |
| Administrative fee | Recordkeeping and servicing | ~0.1%–0.3% / yr |
| Underlying fund expenses | The sub-account portfolios themselves | ~0.5%–1.0%+ / yr |
| Optional rider fees | Guaranteed income or death-benefit riders | ~0.5%–1.5% / yr |
Source: FINRA and SEC Investor.gov variable annuity guidance. Total annual costs of 2%–3% are common and reduce your net return year after year.
FINRA: variable annuities carry mortality and expense risk charges, administrative fees, underlying fund expenses, and charges for optional riders.A worked example using the variable annuity calculator
An investor places $250,000 in a variable annuity and, to plan, assumes a 5% average annual return with income drawn over 25 years. What level monthly income does that scenario imply — and how do fees change it?
Step 1 — Convert the assumed rate and term
The monthly rate is 5% ÷ 12 = 0.004167, and the number of payments is 25 × 12 = 300.
Step 2 — Solve the projected income
Monthly income = $250,000 × 0.004167 ÷ (1 − 1.004167^−300) = $1,461.48, for a projected total of $1,461.48 × 300 = $438,443 over the 25 years.
Step 3 — Subtract the fees the calculator ignores
If roughly 1.25% of fees eat into that 5%, the net return is about 3.75%. Re-running at 3.75% drops the income to about $1,285 a month — a $176 monthly difference that shows why variable-annuity fees matter so much.
How the assumed return swings the income
Because a variable annuity has no guaranteed rate, the most useful thing this calculator does is show how sensitive your income is to the return you actually earn. The table runs the same $250,000 premium over 25 years across a range of net returns.
| Net annual return | Monthly income | Total over 25 years |
|---|---|---|
| 2% (poor market, high fees) | $1,059.64 | $317,891 |
| 3.75% (5% gross − ~1.25% fees) | $1,285.33 | $385,598 |
| 5% (assumed gross) | $1,461.48 | $438,443 |
| 7% (strong market) | $1,766.95 | $530,084 |
Figures use the same payout formula as the calculator, $250,000 premium, 25-year term. The wide spread is the point: a variable annuity's income is a range, not a number.
Who a variable annuity suits — and who should be wary
- Possible fit: an investor who has maxed out other tax-advantaged accounts, wants more tax-deferred growth, and accepts market risk.
- Possible fit: someone who values an optional living-benefit rider that guarantees a minimum income even if the market falls — accepting the rider's extra fee.
- Be wary: anyone sold a variable annuity inside an IRA or 401(k), which is already tax-deferred — you pay for a tax benefit you may not need.
- Be wary: a cost-sensitive investor; the same money in low-cost index funds avoids 2%–3% in annual annuity fees.
Common variable annuity mistakes
- Treating a projection as a guarantee. A single assumed return is a planning scenario; the market will not deliver the same percentage every year.
- Underestimating layered fees. M&E, fund, admin, and rider charges stack — read the prospectus fee table before assuming the headline return.
- Buying it for tax deferral inside a retirement account. An IRA or 401(k) is already tax-deferred, so the wrapper adds cost without adding the tax benefit.
- Ignoring surrender charges. Most variable annuities lock your money for years; withdrawing early triggers a surrender penalty on top of any tax.
Variable annuity definitions
How accurate is this variable annuity estimate?
This is a deliberately simplified projection. It applies one constant assumed return and does not model the year-to-year market swings or the layered fees that define a real variable annuity. Actual outcomes depend on how your chosen sub-accounts perform, the total fees you pay, any riders you add, and the order in which good and bad return years arrive.
Use the result to explore scenarios — try low, middling, and high returns net of fees — but treat it as an illustration, not a guarantee or financial advice. Read the contract prospectus for the full fee schedule and, because variable annuities are complex, consider a fee-only advisor with no stake in the sale.
FINRA — Variable annuities investor information.SEC Investor.gov — Annuities investor bulletin.Frequently asked questions about the free variable annuity calculator
About this Variable annuity calculator
This variable annuity calculator runs entirely in your browser — nothing you enter is stored or sent anywhere. It is a deliberately simplified projection: it converts a premium into level monthly income at one constant assumed return, and it does not model market swings or deduct the 2%–3% in annual fees a real variable annuity charges. Treat the result as one scenario, not a guarantee or financial advice.
It is one of our free insurance calculators. Compare the guaranteed alternatives — the fixed annuity and immediate annuity calculators — or browse the complete calculators directory.