How does the annuity ladder calculator work?
You tell it your total deposit, how many rungs to build, the term of the first rung and how many years apart each later rung starts, plus whether interest is simple or compound. It then projects the maturity value of every rung using the rate you enter for that term, so you can see both the total ladder value over time and when each slice of money becomes free to spend or reinvest.
What a MYGA ladder is and why people build one
Buying a single annuity means picking one term and locking every dollar to that one maturity date. A ladder spreads the same total deposit across several MYGA contracts with different terms, so instead of one maturity you get several, spaced out over the years you choose. Each slice keeps earning its own locked-in rate until its own term ends.
The calculator on this page builds that ladder for you. Enter the total you want to commit, how many separate contracts (rungs) to split it into, and the term structure, and it projects what each rung will be worth when it matures. If you have not built a ladder before, our guide to laddering an annuity strategy walks through who it fits, the tax mechanics and where it can go wrong.
How to use the annuity ladder calculator
- Enter your total deposit. This is the full amount you plan to split across the ladder, such as $200,000 or $500,000.
- Choose the number of rungs. Pick how many separate MYGA contracts to build. Three is the most common starting point.
- Set the first term and the gap between rungs. Decide the length of your shortest rung, then how many years apart each later rung's term should run, for example a first rung of 3 years with each rung stepping up by 2 years.
- Pick simple or compound interest. Most MYGAs compound, but a few advertise simple interest at a higher headline rate, so match the calculator's setting to the actual contract you are pricing.
- Enter a rate for each term. The calculator lets you edit the rate applied to every rung individually, since a 7-year term rarely pays the same as a 3-year term. Use whatever quotes you have in hand or a round, hypothetical number while you plan.
What the calculator is actually projecting
Once you have entered your inputs, the tool runs the same math for every rung in the ladder:
- Growth inside each rung. Every rung compounds (or grows by simple interest, if you chose that setting) at its own rate for its own term, with no tax due along the way because the money sits inside an annuity contract.
- A maturity date for each rung. Because the terms are staggered, the calculator can show you exactly which year each slice of principal plus interest becomes available.
- Different rates for different lengths. Longer terms typically carry a higher rate than shorter ones, so a 7-year rung usually finishes with more interest per dollar than a 3-year rung started at the same time.
Because carrier rates move constantly, the calculator does not pull a live feed. Check the MYGA rate guide for current numbers by term before you lock in a real contract.
A hypothetical example: laddering $240,000
Say a 62-year-old has $240,000 she does not need right away but also does not want tied up in a single 7-year contract. She splits it evenly into three $80,000 rungs: a 3-year MYGA, a 5-year MYGA and a 7-year MYGA.
Using a hypothetical 5.5% rate across all three terms, compounded annually, the 3-year rung would grow to roughly $93,900 at maturity, the 5-year rung to about $104,400, and the 7-year rung to close to $115,700, for a combined ladder value near $314,000 if every rung ran its full course untouched.
When the 3-year rung matures first, she is not locked into anything. She can spend that $93,900, roll it into a new rung at whatever rate is available at that point, or leave the remaining two rungs alone while they keep compounding. That flexibility, one maturity every couple of years instead of one maturity seven years out, is the entire reason to ladder instead of buying a single contract.
Annuity ladder vs CD ladder
A CD ladder uses the identical staggered idea, just with bank certificates of deposit instead of annuity contracts. The structural difference that matters most is tax treatment: MYGA interest is not taxed until you take it out of the contract, while CD interest is reported and taxed as ordinary income every single year, whether or not you touch the money. Our MYGA ladder versus CD ladder comparison breaks down the full picture on yield, safety and taxes, and you can size both side by side in the CD vs annuity calculator.
What this calculator does not do
Treat the output as a planning estimate, not a quote. The rate you type in for each rung is whatever you enter, not a live number pulled from any carrier, and actual availability depends on the insurer, your state, the size of each rung and the specific product features you choose. The projection also assumes you hold every rung to its own maturity; taking money out early can trigger a surrender charge, and those schedules vary a great deal by contract. When you are ready to lock in real numbers, a licensed strategist can run the actual math across the carriers we work with and compare it to what this calculator estimated.
Frequently asked questions
What is a MYGA ladder?
It is a way of splitting one lump sum across several multi-year guaranteed annuities that mature in different years, for example a 3-year, a 5-year and a 7-year contract bought at the same time. Instead of locking every dollar up for the longest term, you get a rung of money becoming available on a regular schedule while the rest keeps earning a locked-in rate.
What sets an annuity ladder apart from a CD ladder?
The structure is the same: several accounts, staggered maturities. The tax treatment is not. A MYGA's interest compounds without being taxed until you withdraw it, while a CD pays out interest that is taxed as income every year it is earned. Over a multi-year ladder, that deferral usually leaves more money in your pocket at the same stated rate, particularly if you are in a higher bracket now than you expect to be later.
How many rungs should I build?
Three to five rungs covers most retirement plans. A simple three-rung ladder, such as terms of 3, 5 and 7 years, gives you a maturity every couple of years without turning into a spreadsheet project. Add more rungs if you want smoother, more frequent access to principal, but each additional rung is another contract, another carrier decision and another renewal date to track.
What should I do when a rung matures?
You have three choices at maturity: take the cash, roll it into a new MYGA at whatever rate is available then (directly, or tax-free through a 1035 exchange), or simply let that rung's carrier renew it at its new declared rate. If rates have climbed since you bought the ladder, maturing rungs let you capture the higher rate instead of being stuck at your original number for the full term.
Is a ladder better than buying one long-term annuity?
It depends on how much you value having money come free on a schedule. A single long-dated MYGA can sometimes carry a slightly better rate than a short one, but every dollar stays locked up until that one maturity date. A ladder trades a little bit of that top rate for the comfort of predictable access, which is usually the better fit if you are not sure exactly when you might need part of the money.
Sources
Educational only, not investment, tax or legal advice. Tax Free Wealth Plan LLC is a licensed insurance agency, not a registered investment adviser or broker-dealer. Annuities are not bank deposits, are not FDIC insured and are not guaranteed by any government agency. Guarantees are backed solely by the claims-paying ability of the issuing insurance company. Features, rates and availability vary by state and change over time; the contract and disclosure documents govern.