Convert a stream of annuity income into an estimated after-tax present value. Enter the payment, expected duration, taxable portion, marginal tax rate, and a discount rate for comparing future cash flow with money available today. The result is especially useful when reviewing annuity offers or alternatives, though guarantees, exclusion ratios, fees, death benefits, and contract-specific tax rules still require separate review.
After-tax payment = payment × [1 − (taxable share × tax rate)]
Present value = after-tax payment × [1 − (1 + monthly discount rate)−months] ÷ monthly discount rate
Use the main result as a scenario estimate and compare it with alternative assumptions. Small changes in tax, return, inflation, or payment terms can compound into meaningful differences.
This is an educational estimate, not tax, investment, insurance, or legal advice. Actual taxes and contract benefits depend on jurisdiction and plan terms.
A $2,500 monthly payment for 20 years, 75% taxable at 24%, equals $2,050 after tax. Discounted at 4%, those payments have an estimated present value of about $338,295.
It is today’s estimated value of future payments after applying the entered taxable share and tax rate.
Some contracts may treat part of a payment as a return of basis; use the taxable percentage supplied by your records or adviser.
It uses the payment period you enter as the analysis horizon, not an actuarial lifetime probability model.
Use a rate appropriate for your comparison, such as a conservative opportunity-cost rate, and test more than one case.
Only if the payment you enter is already net of those fees.
| Input | Meaning |
|---|---|
| Taxable share | Payment portion subject to entered tax rate |
| Discount rate | Opportunity-cost rate for today's value |
| Payment period | Number of monthly cash flows valued |