$50,000 Annuity at 6% Return
20-year accumulation-phase growth projection. Use the calculator below to try your own amounts.
Projected Annuity Balance
$165,510
Example
Starting with $50,000 and contributing $0/month for 20 years at a 6% annual return, your annuity would grow to approximately $165,510 — $115,510 of that is investment growth.
Where the balance comes from
- Principal: $50,000
- Contributions: $0
- Growth: $115,510
What Is an Annuity?
An annuity is a contract, usually issued by an insurance company, that accepts a lump sum or periodic deposits and grows them over an accumulation phase before eventually converting the balance into a stream of payments — often used as a source of guaranteed retirement income.
Annuities come in several types: fixed annuities guarantee a set interest rate, while variable annuities fluctuate with the performance of underlying investments. Immediate annuities begin paying out right away, while deferred annuities — the type modeled by this calculator — accumulate value tax-deferred over years before payouts begin.
Accumulation growth over time
Year-by-Year Growth
| Year | Contributed | Balance | Growth |
|---|---|---|---|
| 0 | $50,000 | $50,000 | $0 |
| 1 | $50,000 | $53,084 | $3,084 |
| 2 | $50,000 | $56,358 | $6,358 |
| 3 | $50,000 | $59,834 | $9,834 |
| 4 | $50,000 | $63,524 | $13,524 |
| 5 | $50,000 | $67,443 | $17,443 |
| 6 | $50,000 | $71,602 | $21,602 |
| 7 | $50,000 | $76,018 | $26,018 |
| 8 | $50,000 | $80,707 | $30,707 |
| 9 | $50,000 | $85,685 | $35,685 |
| 10 | $50,000 | $90,970 | $40,970 |
| 11 | $50,000 | $96,581 | $46,581 |
| 12 | $50,000 | $102,538 | $52,538 |
| 13 | $50,000 | $108,862 | $58,862 |
| 14 | $50,000 | $115,576 | $65,576 |
| 15 | $50,000 | $122,705 | $72,705 |
| 16 | $50,000 | $130,273 | $80,273 |
| 17 | $50,000 | $138,308 | $88,308 |
| 18 | $50,000 | $146,838 | $96,838 |
| 19 | $50,000 | $155,895 | $105,895 |
| 20 | $50,000 | $165,510 | $115,510 |
How Is Annuity Growth Calculated?
During the accumulation phase, an annuity grows like any interest-bearing account: the starting principal compounds monthly, and any additional contributions compound from the month they're deposited. This calculator uses the standard future-value-of-an-annuity formula combined with compound growth on the initial deposit.
Fixed vs. Variable Annuities
A fixed annuity guarantees the rate used in this calculation, making its future balance predictable. A variable annuity's return instead tracks the performance of underlying sub-accounts (similar to mutual funds), so its actual growth could be higher or lower than any single rate you model here.
Tax-Deferred Growth
One of an annuity's key advantages is tax deferral — you don't owe income tax on the growth until you withdraw it, which lets the full balance compound uninterrupted during the accumulation phase shown here, unlike a taxable brokerage account.
Accumulation vs. Payout Phase
This calculator models only the accumulation phase — the years an annuity spends growing before payments start. Once the accumulation phase ends, the balance shown here becomes the starting point for the payout phase, where it's either withdrawn as a lump sum or converted into a stream of guaranteed payments (see the Annuity Payout Calculator).
Example — Your Current Inputs
Starting with $50,000 and contributing $0/month for 20 years at a 6% annual return, your annuity would grow to approximately $165,510 — $115,510 of that is investment growth.
Additional Example — A $50,000 Deferred Annuity
A $50,000 lump sum deposited into a fixed annuity earning 5% annually, with no further contributions, grows to about $132,665 after 20 years of tax-deferred compounding — more than 2.5 times the original deposit.
About These Parameters
- Starting Principal
- The lump sum used to open the annuity contract — many annuities have a minimum initial deposit, often $5,000-$25,000 or more depending on the issuer.
- Monthly Contribution
- Some deferred annuities allow additional periodic deposits during the accumulation phase; others accept only the initial lump sum. Set this to zero if your annuity doesn't allow additional contributions.
- Annual Return Rate & Years
- The rate is guaranteed for a fixed annuity or an assumption for a variable one. The number of years determines how long the balance compounds before you'd move into the payout phase.
Frequently Asked Questions
What's the difference between an annuity and a savings account?
Both compound your balance over time, but annuities are insurance products with tax-deferred growth and a contractual path to guaranteed lifetime income, while savings accounts are simpler, more liquid, and taxed on interest each year.
Can I lose money in an annuity?
A fixed annuity's principal and stated rate are generally guaranteed by the issuing insurer. A variable annuity's value can decline if its underlying investments lose value, similar to market-based accounts.
What happens after the accumulation phase ends?
You typically choose how to receive the balance — as a lump sum, over a fixed number of years, or as guaranteed payments for life. See the Annuity Payout Calculator to model that phase.