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When offered a pension payout, a lump sum gives all money upfront to invest, while an annuity provides guaranteed lifetime income.

Công thức

Annuity PV = Annual payment x [(1 - (1+r)^(-n)) / r]
PV
Annual payment x [(1 - (1+r)^(-n)) / r] — Annual payment x [(1 - (1+r)^(-n)) / r]

Hướng dẫn từng bước

  1. 1Annuity PV = Annual payment x [(1 - (1+r)^(-n)) / r]
  2. 2If Annuity PV > Lump sum: annuity is mathematically better
  3. 3Longevity risk: annuities protect against outliving your money

Ví dụ có lời giải

đầu vào
$500K lump vs $30K/year for 25 years at 6% discount rate
Kết quả
Annuity PV approx $383K - lump sum wins; at 4% rate, PV approx $469K - close call

Câu hỏi thường gặp

What is Annuity Vs Lump?

When offered a pension payout, a lump sum gives all money upfront to invest, while an annuity provides guaranteed lifetime income. Use this calculator for accurate, instant results.

How accurate is the Annuity Vs Lump calculator?

The calculator uses the standard published formula for annuity vs lump. Results are accurate to the precision of the inputs you provide. For financial, medical, or legal decisions, always verify with a qualified professional.

What units does the Annuity Vs Lump calculator use?

This calculator works with inches, watts. You can enter values in the units shown — the calculator handles all conversions internally.

What formula does the Annuity Vs Lump calculator use?

The core formula is: Annuity PV = Annual payment x [(1 - (1+r)^(-n)) / r]. Each step in the calculation is shown so you can verify the result manually.

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