1. Determine the Type of Annuity Owned
2. Determine the type of investment in your annuity. your investments may be of a fixed or variable type. You can also check the type of investment by looking at the documents or contacting the company that issued the annuity. Fixed annuities have a guaranteed interest rate, and that is why payments are guaranteed. A variable annuity is highly dependent on the performance of the underlying investment, and therefore the amount paid is different each month. You choose the type of investment when buying an annuity. This annuity is an object of PPh 21
3. Know your liquidity options. Check the annuity contract or contact the annuity issuing company to find out your annuity liquidity options. You may be subject to penalties for withdrawing funds early. Some of these penalty annuities allow partial withdrawals of funds without penalty. There are also annuities that do not provide a penalty, such as no-surrender or load level annuities.
2. Determine Your Annuity Details
1. Know your annuity payment options. The most popular payment option is the payment of the full amount of the annuity over an agreed period, with all of the remaining balance after your death given to your beneficiary. Another option is payment until death in the absence of an heir, or payment for a specified period including payment to the beneficiary after the death of the collateral for a certain period of time. There are also annuity options that pay the heir for the duration of his life that exceeds yours.
- You will also receive an annuity statement statement. Your balance should be included in this report.
- The annuity statement should also list your interest rate.
3. Calculate Your Payment
- The PVOA factor for the above scenario is 15.62208. Therefore, 65,000,000,000 = Annual payment x 15.62208. As a result, the total annual payment was IDR 32,005,980.
- You can also calculate the payment amount using the “PMT” function in Excel. The syntax is "= PMT (Interest Rate, Number of Periods, Current Value, Future Value)." In the example above, type "= PMT (0.04,25,6500000000,0)" into the cell and press "Enter." There are no spaces in this function. The result displayed is IDR 32,005,980.
- Find future values using FV function in Excel. The syntax is "= FV (Interest Rate, Amount, Added Payment, Current Value)." Enter "0" for additional payout variables.
- Replace future value with the balance of the annuity and recalculate the payment using the formula "Annuity Value = Payment Amount x PVOA factor". Based on these variables, your annual payment is $ 47,559,290,000.
You can also adjust the annual payments to a more frequent frequency. To calculate the monthly payment, divide the interest rate by 12 and multiply the period by 12 before plugging the numbers into the formula.
Financial consultants agree that one should not rely on one source of income to support retirement. Diversification (distribution of sources of income) is very important in all investment portfolios.