Just like pension, an annuity is a distribution of lifetime savings that are earned within a specified period or even paid at one go.  This is later distributed or paid to the annuitant after he or she attains an age of 62 years. Unlike a pension where one is paid the whole lump sum of money, an annuity is distributed as an annual income once one retires, and is determined by the amount of money the annuitant has accumulated or agreed to pay as annuity.

An annuities calculator on the other hand is a spreadsheet that helps one determine the amount of money to pay as annuity. This calculator calculates the amounts depending with the market conditions and economy, and gives an exact amount of money that one is required or willing to pay as per his or her preferences. This calculator gives you an exact amount of what you need to pay per month, or yearly as per your specifications, and is a key tool used by insurance brokers to calculate insurance rates for people.

The other use of this calculator is to help predict life expectancy rates in relation to the current rates, which is also determined by the company offering the same. However, if you are looking for an annuity service provider to use, you will need to make sure shop around for similar companies, and then select a company with cheaper rates to use.

Nonetheless, you also need to be aware of the annuity rates before you can set a fixed amount of money to pay as annuity. An annuity calculator on the other hand acts as a guiding tool that has helped many novices understand what and how much it will take them to secure a better future.

One thing you need to know for sure is that, the less the amount of money you pay for annuities, the less the amount you will receive during your old age. The calculator can help you make a distinctive budget on the amount of money you want to be receiving per month, which means you will be able to set yourself for that, or even change your lifestyle.