Annuity Commission Breakeven

Compare upfront commission vs cumulative trail to find your breakeven year.

Inputs

Adjust to model the case.

Premium ($)

Current Age (at purchase) (yrs)

Age to Start Withdrawals (yrs)

Upfront Commission (%)

Trail Upfront (year 1, on AV) (%)

Trail Commission (year 2+, on AV) (%)

Discount Rate (for PV) (%)

Annuity Payout Rate (client income) (%)

Account Value Growth (%)

Annuity Fee (% of AV) (%)

Projection Years

Upfront Commission

$15,000

Cumulative Trail (20y)

$36,875

PV of Trail @ 4%

$27,884

Breakeven (Nominal / PV)

Y6 / Y7

Upfront vs Cumulative Trail

Year-by-Year

Year	Age	Account Value	Annual Withdrawal	Annuity Fee	Total Withdrawal	Trail	PV Trail	Cum. Trail	Cum. PV Trail	Upfront	PV Trail − Upfront
1	60	$250,000	$0	$12,500	$12,500	$2,500	$2,500	$2,500	$2,500	$15,000	-$12,500
2	61	$250,000	$0	$12,500	$12,500	$2,500	$2,404	$5,000	$4,904	$15,000	-$10,096
3	62	$250,000	$0	$12,500	$12,500	$2,500	$2,311	$7,500	$7,215	$15,000	-$7,785
4	63	$250,000	$0	$12,500	$12,500	$2,500	$2,222	$10,000	$9,438	$15,000	-$5,562
5	64	$250,000	$0	$12,500	$12,500	$2,500	$2,137	$12,500	$11,575	$15,000	-$3,425
6	65	$250,000	$12,500	$12,500	$25,000	$2,500	$2,055	$15,000	$13,630	$15,000	-$1,370
7	66	$237,500	$12,500	$11,875	$24,375	$2,375	$1,877	$17,375	$15,507	$15,000	$507
8	67	$225,000	$12,500	$11,250	$23,750	$2,250	$1,710	$19,625	$17,216	$15,000	$2,216
9	68	$212,500	$12,500	$10,625	$23,125	$2,125	$1,553	$21,750	$18,769	$15,000	$3,769
10	69	$200,000	$12,500	$10,000	$22,500	$2,000	$1,405	$23,750	$20,174	$15,000	$5,174
11	70	$187,500	$12,500	$9,375	$21,875	$1,875	$1,267	$25,625	$21,441	$15,000	$6,441
12	71	$175,000	$12,500	$8,750	$21,250	$1,750	$1,137	$27,375	$22,578	$15,000	$7,578
13	72	$162,500	$12,500	$8,125	$20,625	$1,625	$1,015	$29,000	$23,593	$15,000	$8,593
14	73	$150,000	$12,500	$7,500	$20,000	$1,500	$901	$30,500	$24,494	$15,000	$9,494
15	74	$137,500	$12,500	$6,875	$19,375	$1,375	$794	$31,875	$25,288	$15,000	$10,288
16	75	$125,000	$12,500	$6,250	$18,750	$1,250	$694	$33,125	$25,982	$15,000	$10,982
17	76	$112,500	$12,500	$5,625	$18,125	$1,125	$601	$34,250	$26,582	$15,000	$11,582
18	77	$100,000	$12,500	$5,000	$17,500	$1,000	$513	$35,250	$27,096	$15,000	$12,096
19	78	$87,500	$12,500	$4,375	$16,875	$875	$432	$36,125	$27,528	$15,000	$12,528
20	79	$75,000	$12,500	$3,750	$16,250	$750	$356	$36,875	$27,884	$15,000	$12,884

Account Value Mechanics

Starting AV → growth → fee/payout → ending AV, year by year.

Year	Age	Starting AV	Growth	Annuity Fee	Extra Fee Effect	Payout	Ending AV
1	60	$250,000	+$12,500	−$12,500	−$0	−$0	$250,000
2	61	$250,000	+$12,500	−$12,500	−$0	−$0	$250,000
3	62	$250,000	+$12,500	−$12,500	−$0	−$0	$250,000
4	63	$250,000	+$12,500	−$12,500	−$0	−$0	$250,000
5	64	$250,000	+$12,500	−$12,500	−$0	−$0	$250,000
6	65	$250,000	+$12,500	−$12,500	−$0	−$12,500	$237,500
7	66	$237,500	+$11,875	−$11,875	+$625	−$12,500	$225,000
8	67	$225,000	+$11,250	−$11,250	+$1,250	−$12,500	$212,500
9	68	$212,500	+$10,625	−$10,625	+$1,875	−$12,500	$200,000
10	69	$200,000	+$10,000	−$10,000	+$2,500	−$12,500	$187,500
11	70	$187,500	+$9,375	−$9,375	+$3,125	−$12,500	$175,000
12	71	$175,000	+$8,750	−$8,750	+$3,750	−$12,500	$162,500
13	72	$162,500	+$8,125	−$8,125	+$4,375	−$12,500	$150,000
14	73	$150,000	+$7,500	−$7,500	+$5,000	−$12,500	$137,500
15	74	$137,500	+$6,875	−$6,875	+$5,625	−$12,500	$125,000
16	75	$125,000	+$6,250	−$6,250	+$6,250	−$12,500	$112,500
17	76	$112,500	+$5,625	−$5,625	+$6,875	−$12,500	$100,000
18	77	$100,000	+$5,000	−$5,000	+$7,500	−$12,500	$87,500
19	78	$87,500	+$4,375	−$4,375	+$8,125	−$12,500	$75,000
20	79	$75,000	+$3,750	−$3,750	+$8,750	−$12,500	$62,500