RETIREMENT TOOLS Annuity calculator

An annuity is a long-term, tax-deferred insurance contract that can provide a guaranteed monthly (or other predetermined period) income stream, typically for retirement purposes. There are different types of annuities, many of which are designed to meet specific needs and help clients achieve their retirement goals. Annuities can be either fixed, under which you receive a guaranteed minimum fixed interest rate, or variable, in which the rates and annuity value fluctuate based on the performance of the underlying subaccounts. Your J.P. Morgan advisor has access to various types of annuities and a specific product may be recommended to you based on your needs and your investor profile information. For more information, refer to the FINRA Guide to Annuities.

There are two main types of annuities that can help you prepare for retirement: Fixed annuities and variable annuities.

• Fixed annuities accumulate funds or distribute income at guaranteed rates and in guaranteed amounts. Fixed annuities earn interest at a set rate for a specified period. A fixed annuity may offer predictable returns, tax-deferred growth, and principal protection. Fixed annuities also offer an income option that converts the balance of the fixed annuity into a guaranteed income stream through annuitization.
• Variable annuities accumulate funds or distribute income based on the performance of the underlying investment options chosen by the contract owner. Some of the features variable annuities may include guaranteed lifetime income, standard or enhanced guaranteed minimum death benefits, tax deferral or principal protection. A variable annuity offers a range of investment options. The value of the investments in a variable annuity will vary depending on the performance of the investment options selected. The investment options for variable annuities are typically investment subaccounts or funds that invest in stocks, bonds, money market instruments or some combination of the three.

Please note: This estimate is based on the inputs above and the outlined assumptions regarding the hypothetical variable annuity product. It’s not intended to be an accurate predictor of results or a guarantee of future performance or income payment. The information in this hypothetical is provided for educational purposes only and should not be relied upon to make any financial or investment decisions.

 

The estimated monthly annuity payout is based on your desired amount to invest upfront and the assumed annual payout rate of 5.50%.

 

 

The estimated amount to invest upfront is based on your desired monthly income and the assumed annual payout rate of 5.50%.

 

As noted above, we assume this annuity income rider payout is for a 65-year-old client who chooses a single-life annuity income rider, based on the desired amount to invest upfront or desired monthly income amount, with a 5.50% annual payout rate, beginning in year one. It is a hypothetical variable annuity product, with a guaranteed lifetime withdrawal benefit (GLWB) income rider payout, with no cost-of-living adjustment rider and no annual resets.

 

The monthly payout amount illustrated above does not account for any taxes owed or that you may pay. If you use assets from your qualified retirement plan to fund your annuity, the entirety of your payout will be subject to ordinary income taxes. If you use non-qualified assets to fund your annuity, depending on your cost basis and underlying subaccount performance, each distribution will consist primarily of gains taxed last-in, first-out (LIFO) at ordinary income rates.

 

Your withdrawal percentage will typically depend on your age and whether you chose a single or joint-life rider election at the time you begin taking income.

 

Annuities available at J.P. Morgan Wealth Management are issued by third-party insurance companies that are not affiliated with the company. Annuity payouts or guarantees of any kind are subject to the claims paying ability of the issuing insurance company. The insurance company may offer a monthly payout rate different from the rate assumed in the hypothetical above.

 

Keep in mind that there are many types of annuities and regardless of type, there may be certain factors that can impact the annuity payout amount. To learn more about the options available to you, please contact a J.P. Morgan advisor.