Retirement Annuities

An annuity is a stream of income paid in a series of regular monthly payments. Annuities are usually set up to disburse these payments from a retirement account, and act as an income stream.

When planning for retirement, it is natural to ask what amount of monthly income will I receive given a planned retirement account balance of X dollars, with a planned retirement term of 360 months? Similarly, given a planned retirement account balance of X dollars and a desired monthly income of Y dollars, how many months may I draw income? Finally, given a desired term of income and monthly income amount, what would my retirement balance need to be?

Thus, there are three basic variables involved in computing an annuity: the beginning balance, monthly income amount, and the number of months of income. Given any two of them, one may find the third. Instead of creating three different input and output XML interfaces, only one input format and one output format are used, each of which is detailed below.

Sample Request

The following is a sample request for an annuity calculation, where the monthly income amount is computed based upon the balance at retirement, interest rate and the desired term of income (360 months):

<inANNUITY CalcType="getMonthlyIncome">
  <BeginBalance>500000.00</BeginBalance>
  <IntRate>5.000</IntRate>
  <MonthlyIncome></MonthlyIncome>
  <MonthsOfIncome>360</MonthsOfIncome>
</inANNUITY>

Sample Response

The following is a sample response generated by the sample request above:

<?xml version="1.0" standalone="no" ?>
<!DOCTYPE outANNUITY SYSTEM "outAnnuity.dtd">
<outANNUITY>
  <CalcResult>Valid Calculation</CalcResult>
  <BeginBalance>500000.00</BeginBalance>
  <IntRate>5.000</IntRate>
  <MonthlyIncome>2684.11</MonthlyIncome>
  <MonthsOfIncome>360</MonthsOfIncome>
  <TotalIncome>966279.60</TotalIncome>
  <Gain>466279.60</Gain>
</outANNUITY>