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Plan return checker

Guaranteed-income plans quote big totals. This turns the offer into one yearly return you can compare with anything else.

Effective return

6.8% per year if you live to 80

The one steady yearly rate that turns your 10 premiums into these payouts. Die earlier and it falls; live longer and it rises, but even at 100 it’s 7.1%.

Shown in future amounts. Turn on Today’s money to adjust for 6% inflation.

This plan beats any alternative earning less than 6.8% after tax.

After 6% inflation, that’s a real gain of 0.7% a year.

$
yrs
$
Year 11 is when you’re 43.
$
yrs
yrs
The return depends on how long you live. Try a few ages.
%

Return by lifespan

The longer you live, the more payouts you collect. Pick an age.
Age at death
Show the numbers as a table
Return by lifespan: data
Age at deathEffective return
50−1.1%
51−0.0%
520.9%
531.7%
542.3%
552.9%
563.4%
573.8%
584.1%
594.4%
604.7%
614.9%
625.2%
635.3%
645.5%
655.7%
665.8%
675.9%
686.0%
696.1%
706.2%
716.3%
726.4%
736.4%
746.5%
756.5%
766.6%
776.6%
786.7%
796.7%
806.8%
816.8%
826.8%
836.8%
846.9%
856.9%
866.9%
876.9%
886.9%
897.0%
907.0%
917.0%
927.0%
937.0%
947.0%
957.0%
967.1%
977.1%
987.1%
997.1%
1007.1%
Breakeven
You get back what you paid by age 51
Counting the $100K death benefit. Not counting what that money could have earned.
Inflation reality check
$50,000 at age 80 is worth about $3,200 today
At 6% inflation. Your first payout, at 43, is worth about $27,900.

Money out, money in

Future amounts
You pay$500K
You receive$1.85M
Nominee$100K
Show the numbers as a table
Money out, money in: data
AgeCash flowType
33−$50,000Premium
34−$50,000Premium
35−$50,000Premium
36−$50,000Premium
37−$50,000Premium
38−$50,000Premium
39−$50,000Premium
40−$50,000Premium
41−$50,000Premium
42−$50,000Premium
43$50,000Payout
44$50,000Payout
45$50,000Payout
46$50,000Payout
47$50,000Payout
48$50,000Payout
49$50,000Payout
50$50,000Payout
51$50,000Payout
52$50,000Payout
53$50,000Payout
54$50,000Payout
55$50,000Payout
56$50,000Payout
57$50,000Payout
58$50,000Payout
59$50,000Payout
60$50,000Payout
61$50,000Payout
62$50,000Payout
63$50,000Payout
64$50,000Payout
65$50,000Payout
66$50,000Payout
67$50,000Payout
68$50,000Payout
69$50,000Payout
70$50,000Payout
71$50,000Payout
72$50,000Payout
73$50,000Payout
74$50,000Payout
75$50,000Payout
76$50,000Payout
77$50,000Payout
78$50,000Payout
79$50,000Payout
80$100,000Death benefit

Alternative path

Same money, same timing: invest $50,000 a year for 10 years, then withdraw $50,000 a year from age 43.

%
Left for your heirs at age 80
This plan$100K
Invested at 7%$457K

Same cash flows, and about $457K is still left for your heirs: 4.6× what the plan pays your nominee.

PlanInvest it
Guaranteed?Yes, by the insurerNo, returns vary
Exit earlyPer surrender termsAny time
How this is calculated

We list the plan as yearly cash flows: −$50,000 at the start of years 1–10, +$50,000 each year from year 11 until age 80, then $100,000 to your nominee in the year you die (age 80), with no payout that year.

The effective return is the internal rate of return (IRR): the one steady yearly rate at which everything you pay in exactly funds everything you get back. We find it by bisection.

Σ cash flowt ÷ (1 + r)t = 0
r = 6.8% a year

Breakeven adds up money only (payouts plus the death benefit) and ignores what it could have earned elsewhere. It only counts ages after the last premium.

The alternative path runs the same flows through an investment earning 7% a year, paying in and taking out at the same moments as the plan, then growing for the year. At exactly the plan’s IRR it leaves the death benefit, which is why the verdict above holds.

Today’s money divides a flow in year t by (1 + 6%) to the power t. The real return is (1 + IRR) ÷ (1 + inflation) − 1.

Tax isn’t modelled. Plan payouts and investment gains are taxed differently in each country, so compare after-tax returns.