The data input for the Split Annuity calculator is discussed below:

Desired Goal

There are three options here. Each is discussed below:

Declare Principal, Calculate Income

This is the traditional split annuity concept option. The income stream from the immediate annuity is calculated, and the remaining principal grows back to the original principal amount.

 

Declare Principal and Income

Select this option if the client has a lump sum of money and needs a specific income stream. Based on the income needed, TRAK will determine the initial amount of principal need for the immediate annuity and leave the remaining principal for the deferred annuity. Depending upon the desired income stream, the deferred annuity may not be able to grow back to the original principal amount.

 

Declare Income, Calculate Principal

This option is for the client who needs a specific amount of income for a specific amount of time. TRAK will calculate the initial principal needed, the amount to put into the immediate annuity (to generate the needed income stream), and the amount to be placed in the deferred annuity that will grow back to the original principal amount over the term of the immediate annuity.

DOB

Enter the date of birth for the participant.

Split Annuity Product

Select the split annuity product. The Split Annuity Product editor may be accessed by clicking on the editor icon found to the left of the split annuity product selection box (or by selecting Setup/Split Annuity Product Editor from the main menu).

Annuity Rate

If the Split Annuity product requires an annuity rate to be entered, enter it here.

Minimum Account Value

If the Split Annuity product requires an annuity rate to be entered, enter the minimum account value associated with the annuity rate.

Principal Value

Enter the principal value for both annuities.

Note: This prompt will be enabled only if the Desired Goal is Declare Principal, Calculate Income or Declare Principal and Income.

Gender

If the annuity product requires the gender to be entered, this prompt will be enabled. Select the gender.

Principal Money Type

Select if the money is qualified or non-qualified. If the money is non-qualified, the Non-Qualified Comparison calculation tab will appear.

Tax Rate

Enter the client's marginal tax bracket.

Retained Principal Interest Rate

The goal of the deferred annuity is to grow back to the account's original value. Select if the growth is from the deferred annuity's current interest rate or guaranteed interest rate.

Required Monthly Income

Enter the income required from the immediate annuity.

Note: This prompt will be enabled only if the Desired Goal is Declare Principal and Income or Declare Income, Calculate Principle.