The future value of an annuity formula is used to calculate what the value at a future date would be for a series of periodic payments into your annuity. To use the future value of annuity calculator, enter in the details below. This calculator is also referred to as a future value of lump sum calculator or retirement annuity calculator.

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### Future Value:

##### On This Page:

- what is an annuity
- future value annuity formula
- future value annuity definition
- retirement annuity calculator
- retirement annuity options
- retirement annuity pros and cons

## What Is An Annuity

An annuity is an insurance product that pays out income. Annuities are typically part of a retirement strategy. Annuities are typically funded with a lump-sum payment or via a series of payments over a period of time. The main goal of an annuity is to provide a steady stream of income over time.

## What is the Future Value of Annuity Formula

The formula used in this future value of annuity calculator is as follows

Let…

fV = The future value of the annuity

P = the periodic payment into the annuity

r = rate per period

n = number of periods

fV = P[ ((1+r)^{n}- 1)/r]

## What is the Definition for Future Value Annuity

The

valueof a group of payments at a specified date in thefuture. These payments are known as anannuity, or set of cash flows. Thefuture valueof anannuitymeasures how much you would have in thefuturegiven a specified rate of return or discount rate.

## Retirement Annuity Calculator

A retirement annuity calculator is actually the exact same calculation as the basic annuity calculator above.

## Retirement Annuity Options

The investment options with your retirement annuity vary widely depending on the type of annuity you have setup. If you have chosen a fixed-rate annuity you won’t be responsible for choosing the investments since the insurance company will handle that and will pay you a fixed return.

However, if you have chosen a variable annuity, you actually get to decide how to invest your money and the value of your account will be determined by the funds that YOU choose.

## Retirement Annuity Pros And Cons

**Pros of an Annuity**

- Highest guaranteed payout
- Annuities typically do not have annual fees
- Money grows tax deferred

**Cons of an Annuity**

- Lack of liquidity – you must continue receiving the payments
- No Growth Component
- Lock-in current interest rates