Annuity Payout Calculator
Turn a lump sum into income: the payment a fixed term or a lifetime supports, the total paid, and — for a chosen payment — exactly how long the balance lasts.
Annuity Payout Calculator: with the default inputs, payment is $3,163.25.
The amount being annuitized or drawn down.
What the balance earns while it is being paid out.
Used for the fixed-term basis.
Used for the lifetime basis.
Used for the fixed-payment basis — per period, at the frequency below.
Per period, at the frequency you chose.
- Monthly equivalent
- $3,163
- Annual income
- $37,959
- How long the balance lasts
- 20 years
- Number of payments
- 240
- Total paid out
- $759,179
- Of which is interest earned along the way
- $259,179
- First-year payout as a share of the lump sum
- 7.59%
- Last payment in today's money
- $1,751A level annuity's payments buy less every year.
- Basis used
- Fixed term of 20 years, paid monthly
Assumptions
- The credited rate is constant for the whole payout and interest is credited each payment period.
- Payments are level and made at the end of each period; the fixed-term and lifetime bases run the balance to exactly zero.
- Life expectancy for the lifetime basis comes from the IRS Single Life Table at 26 CFR 1.401(a)(9)-9(b) (Publication 590-B, Table I). It is a published benchmark, not an insurer's mortality assumption, and a real annuity quote will differ.
- Taxes are excluded. Qualified-account withdrawals are fully taxable; non-qualified annuity payments are split by an exclusion ratio.
- Surrender charges, mortality and expense fees, riders, and insurer credit risk are not modelled.
- The inflation figure is used only to restate the final payment in today's money; payments themselves are not indexed.
- Your lump sum$500,00066%
- Interest earned$259,17934%
| Year | Paid out | Interest credited | Cumulative paid | Balance at year end |
|---|---|---|---|---|
| 1 | $37,959 | $22,177 | $37,959 | $484,218 |
| 2 | $37,959 | $21,452 | $75,918 | $467,711 |
| 3 | $37,959 | $20,694 | $113,877 | $450,446 |
| 4 | $37,959 | $19,901 | $151,836 | $432,388 |
| 5 | $37,959 | $19,071 | $189,795 | $413,500 |
| 6 | $37,959 | $18,203 | $227,754 | $393,744 |
| 7 | $37,959 | $17,296 | $265,713 | $373,081 |
| 8 | $37,959 | $16,347 | $303,672 | $351,469 |
| 9 | $37,959 | $15,354 | $341,631 | $328,863 |
| 10 | $37,959 | $14,315 | $379,590 | $305,220 |
| 11 | $37,959 | $13,229 | $417,549 | $280,490 |
| 12 | $37,959 | $12,093 | $455,508 | $254,623 |
How this is worked out
The formula
Rate per period r = annual rate ÷ payments per year Fixed term: Payment = P × r(1+r)^n ÷ ((1+r)^n − 1), n = years × payments per year Lifetime basis: n = life expectancy at your age (IRS Single Life Table) × payments per year Fixed payment: n = −ln(1 − P·r ÷ payment) ÷ ln(1 + r), infinite when payment ≤ P·r
Open How it’s calculated above to see this worked through with your own numbers.
What you enter
- Lump sum
- The amount being annuitized or drawn down.in dollars · 0 or more · defaults to 500000
- Annual rate credited
- What the balance earns while it is being paid out.a percentage · from 0 to 25 · defaults to 4.5
- Payout basis
- Choose one of 3 options.Fixed term — pay it out over a set number of years · As long as I live — benchmark against a published life table · Fixed payment — tell me how long it lasts
- Payout term
- Used for the fixed-term basis.from 1 to 60 · whole numbers only · defaults to 20
- Age payments start
- Used for the lifetime basis.from 50 to 110 · whole numbers only · defaults to 65
- Payment you want
- Used for the fixed-payment basis — per period, at the frequency below.in dollars · 0 or more · defaults to 2500
- Payment frequency
- Choose one of 3 options.Monthly · Quarterly · Annually
- Inflation(under More options)
- Used only to show what the final payment is worth in today's money.a percentage · from 0 to 20 · defaults to 3
What you get back
- Paymentmain answer
- Per period, at the frequency you chose.
- Monthly equivalent
- Annual income
- How long the balance lasts
- Number of payments
- Total paid out
- Of which is interest earned along the way
- First-year payout as a share of the lump sum
- Last payment in today's money
- A level annuity's payments buy less every year.
- Basis used
What this assumes
- The credited rate is constant for the whole payout and interest is credited each payment period.
- Payments are level and made at the end of each period; the fixed-term and lifetime bases run the balance to exactly zero.
- Life expectancy for the lifetime basis comes from the IRS Single Life Table at 26 CFR 1.401(a)(9)-9(b) (Publication 590-B, Table I). It is a published benchmark, not an insurer's mortality assumption, and a real annuity quote will differ.
- Taxes are excluded. Qualified-account withdrawals are fully taxable; non-qualified annuity payments are split by an exclusion ratio.
- Surrender charges, mortality and expense fees, riders, and insurer credit risk are not modelled.
- The inflation figure is used only to restate the final payment in today's money; payments themselves are not indexed.
About this calculator
This is the reverse of a savings calculator. You have a lump sum — a rollover, a pension buyout, an inheritance — and the question is what income it produces and for how long. Three ways to ask it, and the calculator does all three.
The three bases
Fixed term amortizes the whole balance over a set number of years, exactly like a mortgage in reverse: the last payment empties the account. This is what an insurer calls a period-certain annuity, and it is the right frame if you are funding a known gap — a bridge from 62 to 70, say, while you delay Social Security.
As long as I live amortizes the balance over the life expectancy for your age from the IRS Single Life Table. That gives you a defensible, citable benchmark, but be clear about what it is not: a real life annuity pays more than this, because the insurer pools mortality across thousands of buyers and the people who die early subsidise those who do not, and less than this, because of expenses and profit. Treat the number as the figure a quote has to beat, then get quotes.
Fixed payment goes the other way: name the income you want and the calculator solves for how long the balance lasts. If the payment is smaller than the interest, it never runs out and the calculator says so rather than returning a nonsense duration.
Reading the results
- First-year payout as a share of the lump sum is the number to compare with the 4% rule and with any annuity quote you receive. A schedule that deliberately runs to zero can support far more than 4%, because it is not trying to last forever.
- Last payment in today's money is the one people ignore. Level payments are level in dollars, not in purchasing power: at 3% inflation, a payment loses about a third of its value over 12 years and half over 24. Inflation-adjusted annuities exist and pay noticeably less at the start; that gap is the price of the protection.
- Interest earned along the way shows how much of the total comes from the balance continuing to work while it is being drawn down.
Where this breaks down
The credited rate is constant, which is true of a fixed annuity contract and emphatically not true of a portfolio — a self-managed drawdown faces sequence risk, where poor returns early do far more damage than the same returns later. Taxes are excluded, and their treatment differs sharply: withdrawals from a traditional IRA are fully taxable, whereas payments from a non-qualified annuity are part return of basis and part taxable earnings under the exclusion ratio. Surrender charges, riders, mortality and expense fees and the insurer's own credit risk are not modelled. And a life contract with no period certain pays nothing to your heirs — that is the trade for the mortality credit.
Frequently asked questions
▸How much income will a $500,000 annuity pay?
Over a fixed 20-year term at 4.5% credited, about $3,163 a month, exhausting the balance exactly at the end. A real lifetime annuity quote at 65 will differ — often higher than a life-expectancy amortisation, because the insurer pools mortality.
▸What is the difference between a period-certain and a life annuity?
A period-certain pays for a fixed number of years and stops, leaving anything remaining to your estate if you die early. A life annuity pays until you die, however long that is, and typically pays nothing afterwards. You are buying longevity insurance and paying for it by forfeiting the residual.
▸How long will my money last at a given withdrawal?
Choose the fixed-payment basis. The calculator solves n = −ln(1 − P·r ÷ payment) ÷ ln(1 + r). If your payment is less than the interest the balance earns, it lasts indefinitely, and the calculator says so instead of returning a number.
▸Are annuity payments taxed?
It depends where the money came from. Payments from a traditional IRA or 401(k) are fully taxable as ordinary income. Payments from a non-qualified annuity bought with after-tax money are split by an exclusion ratio into a tax-free return of your basis and taxable earnings. Taxes are not included here.
▸Should I annuitise or manage the money myself?
Annuitising removes longevity and sequence risk and hands it to an insurer, at the cost of flexibility, liquidity and any bequest. Self-managing keeps all three and keeps the risks too. A common middle path is annuitising enough to cover essential spending and investing the rest.
Put this calculator on your own site
A working annuity payout, free for any site, with no ads and no sign-up. It resizes to fit wherever you paste it and updates itself as this page improves.
Paste this anywhere. It works on any site, carries no ads, never expires, and always shows the current version.
Annuity Payout Calculator by CalculateItNow
The page's own title. The clearest description of what the link leads to.
The credit line sits outside the widget on purpose, so it is a real link on your page rather than one buried in a frame. Please keep it — it is what pays for CalculateItNow staying free and ad-free. The script only resizes the widget to fit its contents; drop it and the widget still works.
Browse every calculator widget·How to add it to WordPress, Squarespace or Wix
Related calculators
The questions people ask next to a annuity payout.
Solve the present value, future value or payment of a level annuity — ordinary or due — from rate and periods, with the time-value-of-money formulas shown.
Project savings at retirement, the inflation-adjusted income they can sustain, the shortfall vs. your spending goal, and the extra monthly saving to close it.
Annual and monthly pension from years of service, final average salary and a multiplier, plus the survivor option and the lump-sum equivalent.
Required minimum distribution from the IRS Uniform Lifetime Table, with the beginning age under SECURE 2.0, the tax due and the 25% penalty for missing one.
Estimate your Social Security benefit from AIME with the 90/32/15 bend-point formula, your full retirement age, and the early or delayed adjustment.
Project investment growth with monthly contributions, annual raises, fund expense ratios and inflation — with a yearly split of what you invested vs. earned.