Annuity Comparison Calculator: Fixed vs Indexed vs Variable Growth and Income
Choosing an annuity type is hard to do from brochures, because each type grows money a different way: a fixed annuity credits a set rate, an indexed annuity credits interest linked to an index under a cap, and a variable annuity rides the market minus a thick layer of fees. The Annuity Comparison Calculator on this page puts the same premium through all three models over the same number of years, then converts each ending balance into a 20-year monthly income figure, so the trade-off between guarantees and growth shows up as numbers instead of adjectives.
One naming note, because this page used to carry a carrier name. This is an independent educational tool. It is not affiliated with Prudential Financial or any other insurer, it uses no carrier’s live rates, and none of its figures are quotes. If you arrived here looking for Prudential’s own products, the section near the end of this page points you to the official source.
Quick Answer
On a $100,000 premium over 10 years, the three models land at $155,296.94 (fixed, 4.5% a year), $162,889.46 (indexed, 5% illustrated) and $156,789.45 (variable, 4.6% net of fees). Converted to income spread over 20 years at 4%, the indexed model pays the most: $987.08 a month. The rates are illustrative teaching assumptions, not rates from any insurer.
- One premium, three growth engines. The only inputs are your premium and the years until income starts. Everything else is the fixed set of assumptions printed on the tool, so the comparison stays apples to apples.
- Fees decide the variable result. The variable model starts from a 7% market return and still finishes barely ahead of the fixed model, because about 2.4% a year in contract and fund fees compounds away first.
- The income figure is a 20-year spread, not lifetime income. The tool divides each balance over exactly 240 payments. It never asks your age, so it cannot price income that lasts for life.
- No quote hides behind the button. There is no contact form and no carrier rate feed. The output is a model you can check by hand from the formulas below.
- Quick Answer
- Three annuity types on one premium: what the tool models and what it cannot see
- The math underneath: compound growth, then a 20-year income conversion
- Worked example: $100,000 over 10 years, then a longer test
- The fee drag hiding inside the variable model
- Caps, buffers and floors: how the indexed middle option really credits interest
- What the model leaves out: surrender charges, inflation and lifetime income
- Annuity, or keep the money invested?
- What rival calculators get wrong
- Looking for Prudential annuities specifically?
Three annuity types on one premium: what the tool models and what it cannot see
The tool models the accumulation phase of a deferred annuity: one lump-sum premium, left to grow for a set number of years, under three crediting styles. Enter the premium and the horizon, press Compare Annuity Types, and you get all three ending balances, the monthly income each balance could support over 20 years, and a verdict badge that flags whether the indexed model leads the fixed model by 8% or more.
What it cannot see matters as much. Real indexed contracts do not credit a smooth 5% every year: they credit 0% in down years and a capped amount in up years, and the cap can reset at renewal. Real variable contracts do not earn a smooth 7% either: subaccount values swing, and a bad early sequence hurts more than the average suggests. The models here are deliberately smooth so you can isolate one question at a time: given the same premium and the same wait, how much do the crediting style and the fee load change the ending balance? For the contract features that sit outside the math, the National Association of Insurance Commissioners overview of annuity types is a solid neutral primer on how fixed, variable and indexed contracts differ in law and in risk.
- Guaranteed-style rate, no market link
- No annual contract fees in the model
- $100,000 becomes $155,296.94 in 10 years
- Best for: certainty over upside
- Stands in for capped index crediting
- Principal floor in real contracts; smoothed here
- $100,000 becomes $162,889.46 in 10 years
- Best for: growth with guardrails
- 7% market return minus about 2.4% yearly fees
- Real account values can fall; the model cannot
- $100,000 becomes $156,789.45 in 10 years
- Best for: long horizons and risk tolerance
Notice the ranking. The variable model has the highest gross return of the three and finishes second, a whisker ahead of the fixed model. That is not a quirk of these particular rates: it is what a 2.4% annual fee load does to compounding, and it is the single most useful thing a side-by-side model can teach.
The math underneath: compound growth, then a 20-year income conversion
Each balance is ordinary compound growth: future value equals premium times (1 + rate) raised to the number of years. The income figure then treats that balance like a loan running in reverse, using the standard amortization payment formula with a 4% annual rate, monthly payments, and exactly 240 payments.
Because the three rates are close together, the horizon does most of the talking. The longer the wait, the wider the indexed model’s lead over the fixed model grows, from 2.4% at five years to about 10% at twenty:
| Years until income | Fixed at 4.5% | Indexed at 5% | Variable at 4.6% net |
|---|---|---|---|
| 5 years | $124,618.19 | $127,628.16 | $125,215.60 |
| 10 years | $155,296.94 | $162,889.46 | $156,789.45 |
| 20 years | $241,171.40 | $265,329.77 | $245,829.33 |
| 30 years | $374,531.81 | $432,194.24 | $385,434.46 |
Every figure in that table is a $100,000 premium run through the tool’s own code. The pattern to take away is the gap column you have to compute in your head: at 30 years the indexed model leads the fixed model by $57,662.50, while the variable model, despite its market engine, leads by only $10,902.65. Time rewards the low-fee models, which is also why judging an annuity by its first-year illustration is nearly useless. If you want a feel for how long each balance takes to double at these rates, the compound interest doubling time calculator runs that side of the same math.
Worked example: $100,000 over 10 years, then a longer test
The calculator is pre-filled with $100,000 and 10 years. The fixed model: $100,000 x 1.04510 = $155,296.94, which converts to $941.07 a month over 20 years. The indexed model: $100,000 x 1.0510 = $162,889.46, converting to $987.08 a month. The variable model: $100,000 x 1.04610 = $156,789.45, converting to $950.11 a month. The verdict badge reads “Models run close: compare guarantees, not just growth,” because the indexed lead is 4.9%, under the tool’s 8% badge threshold.
Stretch the same premium logic to a smaller premium over a longer wait and the badge flips. A $50,000 premium over 20 years grows to $120,585.70 (fixed), $132,664.89 (indexed) and $122,914.66 (variable), with the best 20-year income at $803.92 a month from the indexed balance. The indexed lead is now 10.0%, so the badge switches to “Indexed model leads by 10.0%.” Nothing about the products changed: compounding simply had twice as long to separate a half-point rate gap. Run both examples in the tool and you will land on the same cents, because the article and the calculator share one set of formulas.
The fee drag hiding inside the variable model
The variable model’s 2.4% fee assumption is not a straw man. The SEC’s Investor.gov guide to variable annuities lists the usual layers: a mortality and expense charge (1.25% a year is its worked example), administrative fees around 0.15%, the expense ratios of the underlying funds themselves, and extra charges for optional riders such as guaranteed lifetime withdrawal benefits. Stack the common layers and totals between 2% and 3% a year are routine, before any rider.
Compounding turns that drip into a flood. On $100,000 over 30 years, a 7% gross market return reaches $761,225.50. Net of 2.4% in fees, at 4.6%, the same premium reaches $385,434.46. The $375,791.05 difference is not a market loss: it is the fee load, compounded. None of this makes variable annuities pointless, since the fees buy real insurance features, tax deferral and death benefits among them. It does mean the honest comparison is never “market return versus annuity rate.” It is “market return minus every layer of cost, versus the guaranteed or capped rate,” which is exactly the comparison this tool hard-codes.
Caps, buffers and floors: how the indexed middle option really credits interest
An indexed annuity never invests your premium in the index. The insurer credits interest based on index movement, then trims the result with contract terms. The SEC’s Investor Bulletin on indexed annuities names the three usual trims: a participation rate (you get a percentage of the gain), a cap (a ceiling on the credited rate), and a spread (a percentage subtracted from the gain). A year when the index rises 12% might credit 7% under a cap, or 9% under a 75% participation rate, or 9% after a 3% spread. The tool’s flat 5% illustrated rate is a stand-in for the long-run average of that stop-start pattern, not a promise about any single year.
Downside terms split the indexed family in two. A fixed indexed annuity carries a 0% floor: a down index year credits zero, and the account value does not fall from index movement. A registered index-linked annuity (RILA) trades that floor for a buffer or shield: the insurer absorbs the first slice of a loss, commonly 10%, and you absorb losses beyond it, in exchange for higher caps. FINRA’s annuities overview makes the regulatory point that follows from this: RILAs are securities as well as insurance, because the buyer genuinely shares market risk. Calling a buffer “protection” without the word “partial” in front of it is the most common sales blur in this category, and it is worth being blunt about: past the buffer, the loss is yours.
What the model leaves out: surrender charges, inflation and lifetime income
Three real-world costs sit outside this tool, and each one can outweigh the rate ranking it shows. First, surrender charges: deferred annuities commonly charge for withdrawals above a small free amount during the first five to ten years, on a schedule that starts high and steps down. The model assumes you hold to the horizon and pay none. Second, rider fees: the guaranteed lifetime income riders that make indexed and variable contracts attractive typically cost around 1% a year of account value, charged in good years and bad, and the model includes no rider because it models no rider benefit. Third, taxes and penalties: gains come out taxed as ordinary income, and withdrawals before age 59 and a half can draw a 10% federal penalty on the taxable portion, as the IRS sets out in Topic No. 410 on pensions and annuities.
The biggest omission is mortality. The income figures here spread a balance over exactly 20 years and stop, whoever is alive at the end. A lifetime income annuity does the opposite: it prices your age and life expectancy, pools the risk across thousands of buyers, and keeps paying for as long as you live, which is why a lifetime quote for the same balance can be higher or lower than the 20-year figure depending on the age income starts. The Social Security Administration’s life expectancy calculator shows why insurers care: a 65-year-old is expected to collect for roughly two more decades on average, with wide variation either way. If lifetime income is the product you are actually shopping for, use a tool built for it: our immediate annuity calculator prices income that starts now and runs for life, a different question from the growth comparison on this page. Treat the 20-year numbers here as a common yardstick for comparing growth models, never as a lifetime income quote.
Inflation deserves one plain sentence of its own. A level $987.08 a month buys less every year it is paid, and none of the three models includes a cost-of-living increase. Contracts that add one pay a lower starting amount in exchange, a trade this tool does not model and brochures rarely volunteer.
Annuity, or keep the money invested?
The growth table makes annuities look like a pure rate contest, and they are not. What an annuity sells, underneath the crediting method, is a guarantee backed by an insurer, plus tax-deferred growth with no annual contribution limit. What it charges, beyond visible fees, is liquidity and control. Weighing the two honestly:
- A contractual floor or guaranteed rate the market cannot take back
- Tax-deferred compounding with no yearly contribution cap
- Optional lifetime income and death benefit riders
- Forced patience: surrender charges discourage panic exits
- Full liquidity: sell any day, no surrender schedule
- Far lower ongoing costs in a plain index portfolio
- Gains can qualify for capital gains tax rates, not ordinary income
- Your heirs, not an insurer’s pool, keep what you do not spend
Plenty of households split the difference: an annuity to floor the essential bills, investments for everything above the floor. If you want the market side of that split in numbers, our ETF investment calculator projects a low-cost portfolio on its own assumptions, and the contrast in fee loads between the two pages is itself instructive. Whichever side you lean toward, the NAIC’s retirement tools guide lists the checks to run before signing anything: confirm the agent and company are licensed in your state, read the surrender schedule in the contract itself, and use the free-look period if the paperwork surprises you.
What rival calculators get wrong
The big generalist sites split this job in two and lose the comparison. Calculator.net runs a capable accumulation calculator with regular deposits, then sends you to a separate payout calculator for the income phase, so the three annuity types are never priced against each other on one screen. Annuity.org prices lifetime income well, with age, gender and payout structure, but the calculator is the top of a quote funnel: the estimate exists to match you with an agent, and the assumptions behind the rates are not shown as formulas you can audit. MyAnnuityStore comes closest on honesty, with separate fixed, immediate and income-rider tools fed by current carrier rates, yet the type comparison still takes three tools and three sets of assumptions. Omni Calculator’s payout tool is clean formula work, but it prices one balance at one rate: there is no fee-drag model and no second type to compare against.
The gap this page fills is narrow and specific: one premium, one horizon, three crediting styles with the variable fee load subtracted in the open, and every balance carried through to the same 20-year income yardstick, with no form standing between you and the result. Its limits are printed in the section above rather than footnoted: no age, no mortality, no surrender schedule, no rider pricing. A calculator that shows you its assumptions beats a quote engine that hides them, provided you remember which questions it never claimed to answer.
Looking for Prudential annuities specifically?
If Prudential is the carrier you meant to research, the honest pointer is short. Prudential Financial sells fixed, fixed indexed, registered index-linked and variable annuities through licensed financial professionals, and its official Retirement Annuities and Solutions page carries the current lineup, prospectuses and disclosure statements. This page is not affiliated with Prudential, does not use its rates or product terms, and cannot tell you what any Prudential contract would credit or pay. What it can do is give you the comparison framework to bring to that conversation: ask what the cap or participation rate is today and whether it can reset, what every fee layer adds up to per year, how long the surrender schedule runs, and what any income rider costs. A carrier illustration that cannot answer those four questions in writing is not ready to be compared against anything, including the simple model on this page.
Frequently Asked Questions
It grows one lump-sum premium over your chosen number of years under three models: fixed at 4.5% a year, indexed at an illustrated 5%, and variable at 4.6% net (a 7% market return minus 2.4% in annual fees). It then converts each ending balance into a level monthly payment spread over 20 years at 4%. It models the growth phase of a deferred annuity and a fixed-term income conversion, nothing more.
No. They are fixed illustrative assumptions chosen to be plausible for each type, printed on the tool so you can judge them. No insurer’s current rates feed this calculator, and real contracts differ: fixed rates are set for a guarantee period, indexed crediting depends on caps and participation rates that can reset, and variable returns follow actual subaccount performance minus actual fees.
Because the tool never asks your age, sex or health, it cannot price lifetime income, which depends on life expectancy and mortality pooling. It uses a 20-year period-certain conversion at 4% as a neutral yardstick so all three growth models are measured the same way. A lifetime annuity quote for the same balance will differ, higher if income starts late in life, lower if it starts young or covers a spouse.
Yes. The model smooths the market into a constant 7% gross return so the fee effect is visible. Real subaccounts rise and fall, fees are charged in down years too, and a variable account can finish a period below the premium paid. The SEC’s Investor.gov variable annuity guide warns in plain terms that you can lose money, including your original investment.
A floor caps your loss at a set level: with a 0% floor, a down index year credits zero and your value does not fall from index movement. A buffer absorbs only the first slice of a loss: with a 10% buffer and a 30% index fall, you absorb roughly the remaining 20%. Buffers come with higher caps, so the trade is more upside for defined, real downside.
In a real contract, yes, and the model includes neither. Surrender charges apply if you withdraw above the free amount during the early years, commonly a schedule declining over five to ten years. Income and death benefit riders add their own annual fees, often around 1% of account value, which would compound against every balance shown here. Both belong in any comparison of actual contracts.
No. This is an independent Calculator Zilo tool. It is not affiliated with, endorsed by, or sponsored by Prudential Financial, and it uses no Prudential rates, products or data. The page previously carried the Prudential name; it was retitled because the tool models annuity types generically. For Prudential’s actual products and disclosures, use prudential.com.
Annuitizing trades control for a guarantee: you hand the balance to the insurer for income you cannot outlive, and the decision is generally permanent. Withdrawals keep control and any remainder for heirs, but the risk of outliving the money stays with you. FINRA’s annuity guidance stresses that same fork. Many buyers split it, annuitizing enough to cover essential spending and keeping the rest invested and liquid.
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References
- Financial Industry Regulatory Authority (FINRA). Annuities. Accessed October 21, 2026.
- U.S. Securities and Exchange Commission, Investor.gov. Variable Annuities. Accessed October 21, 2026.
- U.S. Securities and Exchange Commission, Office of Investor Education and Advocacy. Updated Investor Bulletin: Indexed Annuities. Accessed October 21, 2026.
- National Association of Insurance Commissioners (NAIC). Insurance Topics: Annuities. Accessed October 21, 2026.
- National Association of Insurance Commissioners (NAIC). Tools for Retirement. Accessed October 21, 2026.
- Internal Revenue Service. Publication 575: Pension and Annuity Income. Accessed October 21, 2026.
- Internal Revenue Service. Topic No. 410: Pensions and Annuities. Accessed October 21, 2026.
- U.S. Securities and Exchange Commission, Investor.gov. Compound Interest Calculator. Accessed October 21, 2026.
- Social Security Administration. Retirement and Survivors Benefits: Life Expectancy Calculator. Accessed October 21, 2026.
- Prudential Financial. Retirement Annuities and Solutions (official product and disclosure page, cited only for the pointer section). Accessed October 21, 2026.