Annuity Percent Formula

An annuity is a long term investment that is issued by banks to help protect you from the risk of outliving your income. Through annuitization, your purchase payments are converted into periodic payments that can last for your life. Here given the annuity percent formula that can apportion your investment funds, and just tells you how much annuity amount to buy. The formula is based on the withdrawal rate, sustainable withdrawal rate and annuity rate.


AP = (WR - SWR) / (AR-SWR)


AP = Annuity Percent
WR = Withdrawal Rate
SWR = Sustainable Withdrawal Rate
AR = Annuity Rate

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Annuities can pay more than prevailing interest rates because some of the money is return of principal, plus the bank keeps the annuity premiums of those who die early to make the payouts of those who live longer. Use this annuity percent formula for calculating the percentage of annuity required to pay.

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