Secondary market annuity calculator

Two numbers do most of the work. The effective annual yield is the true annual return that ties the price you pay to the payments you collect, with compounding accounted for. It is the figure to compare across streams, and against a CD, a Treasury, or a new annuity. The weighted average life tells you the average time your capital is committed, weighting each payment by size and timing, which is a more honest read of the horizon than the final payment date alone.

The year-by-year table splits each year's payments into the portion that is yield and the portion that returns your original capital, with the balance still outstanding at each year's end. It is the same shape as a loan amortization, seen from the lender's side, because as the buyer of the stream, that is effectively what you are.

Notice how a later start date or a longer schedule lifts the yield. That is the discount at work, and it is why patient capital is rewarded in this market. For the why behind the numbers, see whether a secondary market annuity is a good investment and where today's live yields by category sit.