An annuity table is a practical tool for wealth management. It translates the time value of money into easy-to-understand numbers. Instead of running complex formulas, you scan a table to determine the present or future value of your annuity payments. This insight can help you make better decisions about saving, investing, and retirement planning. 

This article shows you how to use an annuity table to calculate the present value (PV) or future value (FV) of your annuity payments. With clear examples, we’ll show you how these tables help eliminate the need for complex math.

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What is an annuity table, and why does it matter?

An annuity table helps you calculate the present or future value of a series of annuity payments using the interest (or discount) rate and the number of payment periods. It accounts for the time value of money — the concept that a dollar is worth more today than a dollar is worth tomorrow due to how inflation erodes purchasing power. 

Actuaries, financial professionals, and investors use annuity tables to estimate the value of ordinary annuities, annuities due, and other structured payouts. You can use a table to answer questions like:

• What do I need to invest today to receive $10,000 annually in 15 years? 
• What is my annuity worth using the future value of a dollar?

How do annuity tables work?

An ordinary annuity table uses columns to show different interest rates and rows to display time periods, typically measured in years. Where the rate and time meet, you have the annuity factor. These tables are general guidance and estimates and should not be thought of as 100% accurate but can be a useful tool to give you an idea of PV and FV. 

For example, let’s look at how to calculate the PV of receiving $10,000 annually for 15 years at a 6% annual interest rate. Using a PV of an ordinary annuity table, you would find the annuity factor where 15 years and 6% intersect — approximately 9.712. Multiply the annuity payment of $10,000 by 9.712 to get a PV of $97,120. This means that the PV of your future payments equals $97,120. 

In practical terms, if you had $97,120 today and generated an annual interest rate of  6%, you could withdraw $10,000 annually from your annuity for 15 years before the account balance reaches zero. 

The following PV annuity factor table shows examples of how interest rates and time periods impact the value of future payments:

Hypothetical example for illustrative purposes only

Present or future table?

Choose a present or future value annuity table based on whether you’re looking at your investment needs today or trying to project future growth. 

Present value of annuity table

The present value of an annuity table helps you determine what a series of future payments is worth today. It can be ideal for evaluating investments and retirement distributions or to prepare for large future expenses now. For example, if you want $5,000 a year for 15 years, a PV annuity table can help you figure out how much to invest today to generate that income. 

Future value of annuity table

The future value of an annuity table helps illustrate how your current investments will grow over time. Use this tool to set realistic financial goals and anticipate future retirement income streams. If you plan to save $5,000 a year for 15 years, a FV annuity table shows you how much that should grow.

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When do you need to use an annuity table?

Whether you need to know the value of a fixed annuity or you’re considering other types of annuities, understanding how to use these tables can help you solidify your long-term financial plan. Here are key moments when you should use one: 

• Comparing a lump sum vs. annuity stream: If you receive a legal settlement, you might have the option to choose between a lump sum or series of annuity payments. An annuity table shows which choice can provide better value. 
• Evaluating lottery payout options: Like with legal settlements, lottery winners can often choose between receiving a lump sum or a series of payments over a fixed time period. An annuity calculator lets you easily see the present value of a payout in today’s dollars. 
• Planning retirement distributions: When assessing retirement savings, you can use annuity tables to convert future income streams into present values to see how they might fit within your portfolio and overall investment plan. 
• Doing corporate financial planning or accounting: Businesses often rely on annuity tables to evaluate long-term liabilities, forecast asset growth, and plan for future cash flows. 

Simplify retirement planning with Gainbridge 

Annuity tables can help simplify otherwise complicated financial calculations. Whether you’re planning retirement income, evaluating a windfall of cash, or trying to understand how annuity payments will look in the future, these tools can take the complexity out of determining the present and future value of an annuity. 

Gainbridge aims to simplify annuity planning. We show you how annuities work and help you integrate them into your retirement portfolio. 

Explore Gainbridge’s digital-first annuities today to see how they could help you build a stream of predictable, guaranteed income in retirement — with no hidden fees or commissions. 

‍This article is intended for informational purposes only. It is not intended to provide, and should not be interpreted as, individualized investment, legal, or tax advice. For advice concerning your own situation please contact the appropriate professional. The GainbridgeⓇ digital platform provides informational and educational resources intended only for self-directed purposes. Past performance is not indicative of future results.