Annuity Payout Calculator

What this annuity payout calculator does

This calculator estimates the regular payment you could receive from an annuity principal over a fixed number of years. It assumes the remaining balance earns a constant interest rate and is fully paid out by the end of the term.

The result includes the payment per period, the number of payments, total withdrawals, and total interest earned during the payout phase.

How to use this calculator

1. Enter the starting principal.
2. Enter the annual interest or return rate.
3. Enter the number of years to pay out.
4. Choose the payout frequency.
5. Click Calculate.

The default example uses a $500,000 principal, a 6% return, 10 years, and monthly payments. The monthly withdrawal is $5,511.20.

Annuity payout formula

The payment per period is:

PMT = P × r / (1 − (1 + r)^−n)

P is the starting principal, r is the interest rate per payout period, and n is the total number of payments. The annual rate is converted to the payout frequency using an effective periodic rate.

Total payments are the payment amount multiplied by the number of periods. Total interest is total payments minus the starting principal.

What the results include

• Payment per period: the regular withdrawal.
• Payments per year: the selected payout frequency.
• Total payments: the number of withdrawals.
• Total withdrawals: the sum of all payments.
• Total interest: the return earned during the payout phase.
• Annuity balances: yearly beginning balance, interest, and ending balance.

Assumptions and limitations

The calculator assumes a fixed return, equal payments, and a fixed payout period. It does not model taxes, fees, mortality credits, inflation, variable returns, or a lifetime payout option. The final balance is intended to reach zero at the end of the term.

Frequently asked questions

Is this the same as a lifetime annuity?

No. This is a fixed-period payout. A lifetime annuity uses mortality assumptions and may pay for as long as you live.

What happens if the return is 0%?

The principal is divided equally across the payments. There is no interest, so total withdrawals equal the starting principal.

Why does a higher return produce a higher payment?

A higher return means the remaining balance grows faster, so the same principal can support a larger payment over the payout period.

Does the calculator include taxes?

No. Taxes on annuity payments and earnings are not modeled.

Source

References:

• Investor.gov — Annuities
• Consumer Financial Protection Bureau — Saving

Disclaimer

This calculator is for informational and planning purposes only. It is not a quote or financial advice. Actual annuity payouts depend on the contract and insurer.