Annuity Calculator: What a Fixed Annuity Grows To and What It Pays
Written by Hans Goldstein, independent licensed insurance producer · CA lic. #4273294 · NPN 20602398Last updated
Short answer: a fixed annuity or MYGA grows at a guaranteed rate for a set term. $100,000 at 5.50% compounded for 5 years grows to $130,696. The same $100,000 pays about $458 a month interest-only, or about $1,079 a month if it is paid out to zero over 10 years at 5.50%. Put in your own numbers below.
How does this annuity calculator work?
It does three things with one deposit and one guaranteed rate.
Growth. Compound crediting uses deposit × (1 + rate)years. Simple crediting, which a few contracts use, is deposit × (1 + rate × years) and pays less. A 6.95% simple rate over 5 years earns the same as about 6.40% compound, so compare contracts on the compound figure.
Income. Interest-only income is a year’s interest divided by 12, and your principal stays put. Level income pays the balance down to zero over the years you pick, the same math as a period-certain payout.
Annuity vs CD. A CD’s interest is taxed every year even if you leave it in. A non-qualified annuity defers tax until you withdraw, so the whole balance compounds. At the end the calculator taxes the annuity’s gain at your rate (plus 10% if you tick the under-59½ box) and compares it with the CD after its yearly tax.
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What does $100,000 in a 5-year MYGA grow to?
Worked example, compound interest, no withdrawals:
| Rate | After 5 years | Interest earned | Interest-only, per month |
|---|---|---|---|
| 4.50% | $124,618 | $24,618 | $375 |
| 5.30% | $129,462 | $29,462 | $442 |
| 5.50% | $130,696 | $30,696 | $458 |
| 5.80% | $132,565 | $32,565 | $483 |
| 6.00% | $133,823 | $33,823 | $500 |
The 4.50% row is a top 5-year CD APY for scale; a CD pays tax on the interest each year, so its after-tax result is lower than the table shows. The 5.30% to 6.00% rows cover the range of dated 5-year MYGA rates on my 5-year MYGA rate table.
Is a MYGA better than a CD after tax?
Worked example: $100,000 for 5 years, 24% tax rate, MYGA at 5.50% compound vs CD at 4.50% APY.
- MYGA: grows to $130,696. Tax of 24% on the $30,696 gain when you cash out leaves $123,329.
- CD: 4.50% less 24% tax each year is 3.42% net, so $118,310 after 5 years.
The MYGA comes out about $5,019 ahead, but only if you hold it to the end of the surrender period. A CD’s early-withdrawal penalty is usually a few months of interest; a MYGA’s surrender charge is a percentage of the account and can be several percent in the early years. That trade is the whole decision. For a state-tax view, use the MYGA vs CD after-tax calculator.
How much income does a fixed annuity pay?
It depends on whether you keep the principal. On $250,000 at 5.80%, interest-only is $1,208 a month and the $250,000 stays yours. Turning the same money into lifetime income with an immediate annuity pays more each month, because part of every check is your own principal coming back. A 65-year-old man averaged $639 a month per $100,000 for life-only in the September 9, 2026 ImmediateAnnuities.com survey. See the immediate annuity calculator for that math.
What costs and limits should I check before I buy?
Put these next to the rate, not below it:
- Surrender schedule. Usually as long as the rate guarantee. Early withdrawals above the free amount lose a percentage, often highest in year one. Run it in the surrender charge calculator.
- Market value adjustment. Many MYGAs adjust an early surrender up or down with interest rates. How an MVA works.
- Free withdrawals. Often 10% a year or the credited interest; some contracts allow none.
- Taxes. Gains come out first and are ordinary income, plus a possible 10% federal additional tax before 59½.
- Who guarantees it. The insurer, through its claims-paying ability, backed up to limits by your state guaranty association. It is not FDIC coverage.
Related calculators and guides
- What is a MYGA? The complete guide
- Best 5-year MYGA rates, dated and sourced
- Immediate annuity (SPIA) calculator
- MYGA growth calculator (compare two rates)
- MYGA monthly income calculator
- Annuity vs CD calculator
Who publishes this page. Hans Goldstein, independent licensed insurance producer, CA Insurance License #4273294, NPN 20602398 · Goldstein & Co. LLC dba Goldstein Insurance Services, CA License #6016830. Questions: hans@hansgoldstein.com. I am paid a commission by the insurer when a client buys an annuity through me; see my commission disclosure. No carrier paid to be listed or ranked here.
What the guarantee is. Fixed annuity and MYGA guarantees are guaranteed by the issuing insurer’s claims-paying ability. Annuities are insurance contracts, not bank deposits: they are not FDIC-insured, not bank-guaranteed and not a CD. State guaranty association protection has limits and varies by state. Surrender charges and, on many contracts, a market value adjustment apply to withdrawals above the free amount during the surrender period. Withdrawals of earnings are taxed as ordinary income and, before age 59½, may also owe a 10% federal additional tax (IRC §72(q)).
Education, not tax or legal advice. Rates and payouts vary by state, premium, age and date; confirm on the carrier’s rate sheet or a signed illustration before you buy.
Frequently asked questions
How much will $100,000 grow in a 5-year fixed annuity?
At 5.50% compound it grows to $130,696; at 6.00% to $133,823. The rate is guaranteed for the term by the issuing insurer's claims-paying ability, and early withdrawals above the free amount pay a surrender charge.
How much does a $100,000 annuity pay per month?
Interest-only at 5.50% is about $458 a month with the principal kept. Paid to zero over 10 years it is about $1,079. As lifetime income from an immediate annuity, a 65-year-old man averaged $639 a month and a 65-year-old woman $612 in the September 9, 2026 ImmediateAnnuities.com survey.
Is annuity interest taxed every year?
Not in a non-qualified annuity. Tax is deferred until you withdraw, and then earnings come out first and are taxed as ordinary income. Before age 59½ a 10% federal additional tax may also apply. In an IRA the IRA rules govern instead.
Is a MYGA the same as a CD?
No. A MYGA is an insurance contract, guaranteed by the issuing insurer's claims-paying ability and backed up to limits by a state guaranty association. A CD is a bank deposit insured by the FDIC. They differ on tax timing, early-withdrawal cost and who stands behind the guarantee.
What is the difference between simple and compound interest on a MYGA?
Compound interest earns interest on prior interest; simple interest does not. Over 5 years, 6.95% simple equals roughly 6.40% compound, so a simple-interest headline rate looks higher than it is.