Lump sum present value annuity calculations are typically used for calculating loan payments, whereas present value of future payments are typically used for calculating retirement savings needed to generate the desired retirement income. Unfortunately, you won’t know if the life-expectancy present value … The calculator does not work with Internet Explorer.

Compounding interest can increase future benefits dramatically, so choosing a high percentage rate can exaggerate the future benefits, and present value, of your pension. This interest rate is used to figure out how much a given amount of money in the future will be worth compared to now. Important! An Annuity Due indicates payments are received or made at the beginning of each period, whereas an Ordinary Annuity indicates payments are received or made at the end of each period. If you would like to save the current entries to the secure online database, tap or click on the Data tab, select "New Data Record", give the data record a name, then tap or click the Save button.

You can see right away that the first thing I needed to know was the future value of the pension … Who knows if I will show up in your next search. This calculator will calculate the present value of an annuity starting with either a future lump sum, or with a future payment amount. Or, if you chose to enter a future payment amount, this result represents the amount you would need to deposit now in order to be able to withdraw the payment during each period interval over the course of the entered number of years. How to use the Moving the slider to the left will bring the instructions and tools panel back into view.

Ouch! You need to find this information from your specific pension plan. In the examples of calculations given by Altschuler and Kelley in Value of Pensions in Divorce, the “life expectancy” method of calculation gives present values that range from about 20% too high to 20% too low. This is for COLA’s that have compounding interest. But in this case YOU are the lender who is charging the borrower interest over and over again on many of the dollars you loaned them. Also note that some calculators will reformat to accommodate the screen size as you make the calculator wider or narrower. This means you are being charged interest on the same borrowed dollars many times over. This is, of course, due to things like inflation and interest rates. If a Data Record is currently selected in the "Data" tab, this line will list the name you gave to that data record. This will insure you'll always know what I've been up to and where you can find me! Finish up by choosing one of the following compounding intervals: daily, weekly, monthly, quarterly, annually. It provides ballpark approximations of present value using the life expectancy method of calculation.

This calculator can help you figure out the present day value of a sum of money that will be received at a future date. Some pensions call this “simple interest” on a specific amount, e.g., 2% of your first annual benefit.