What Is an Annuity Payment
An annuity payment is a regular income stream paid from an annuity contract. It can be part of a person’s net worth when the contract has cash value or future income rights.
How Annuity Payments Are Calculated
Payments are calculated using the principal, interest rate, and payment period. Common methods include present value and future value formulas. For fixed annuities, each payment equals the principal plus interest divided over the term. Variable annuities depend on underlying investment performance.
Including Annuity Payments in Net Worth
Net worth is assets minus liabilities. Annuity cash value and expected income streams can be included as assets. To value an annuity, use the present value of future payments or the contract’s surrender value. Learn more about net worth calculations at https://www.investopedia.com/terms/n/net-worth.asp.
