Annuity Payout Calculator
Work out the income an annuity pays out, for a fixed term or for life.
About Annuity Payout Calculator
When you annuitize, the accumulated value becomes a stream of level payments. The payment formula is the same as a loan amortization in reverse: the issuer 'lends' you a lump sum (your premium) and you receive periodic payments that gradually return both principal and interest. The key variables are the starting balance, the credited rate, and the duration — for a lifetime payout, duration is approximated by your life expectancy.
Formula
Periodic annuity payment
Payment = Balance × rate / (1 − (1 + rate)^−periods)
- PV
- Annuity starting balance
- r
- Periodic interest rate
- n
- Total number of payments
Worked example
With the default values below, Annuity Payout Calculator returns Payment per Period of $1,817.94. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Annuity Value (Starting Balance)minimum 1 $
- 300,000 $
- Annual Interest / Payout Rateaccepts 0–12
- 4
- Payout Modeone of Fixed Period, Lifetime (Life Expectancy)
- Fixed Period
- Payout Period (Years)accepts 1–50
- 20
- Current Ageaccepts 40–90
- 65
- Life Expectancyaccepts 65–110
- 88
- Payment Frequencyone of Monthly, Quarterly, Semi-annually, Annually
- Monthly
Results
- Payment per PeriodAt the selected payment frequency.
- $1,817.94
- Annual Income
- $21,815
- Monthly EquivalentFor budgeting comparison regardless of payout frequency.
- $1,817.94
- Total Payout
- $436,306
- Interest Earned in Payout Phase
- $136,306
- Payout RateAnnual payment ÷ starting balance.
- 7.27%
- Payout Period
- 20 years
Step by step
- 1Payout period= 20 years
- 2Periodic rate (4%/yr ÷ 12 periods/yr)= 0.3333%
- 3Monthly payment= $1,817.94
- 4Total payout over full term= $436,306
- 5Interest earned during payout= $136,306
Assumptions and limits
- The result is derived only from the 7 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation or tax into account.
- Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
- Lifetime payout estimates use life expectancy, not guaranteed durations. Actual annuity quotes from insurers depend on your age, gender, health and prevailing interest rates.
- This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Lifetime payout estimates use life expectancy, not guaranteed durations. Actual annuity quotes from insurers depend on your age, gender, health and prevailing interest rates.
Frequently Asked Questions
What is the difference between fixed-period and lifetime payout?
A fixed-period annuity pays for a guaranteed number of years, after which payments stop regardless of whether you're alive. A lifetime annuity pays as long as you live — the insurer bears the longevity risk, which is why their payouts use actuarial rates that account for expected survival. This calculator approximates lifetime payout by using your life expectancy as the fixed period.
Why is the total payout more than my starting balance?
Because the remaining balance continues earning interest throughout the payout phase. Each payment has two components: return of principal and interest on the outstanding balance. The total interest earned can be significant over a 20–30 year payout.
What payout rate is typical from an insurance company?
Actual quotes from insurers (called 'annuity payout rates' or 'annuity income factors') depend on current interest rates, your age, and whether payments are single or joint life. For context, a common rule of thumb is $500–$700 monthly per $100,000 for a 65-year-old in a typical rate environment.
Should I use monthly or quarterly payments?
Monthly payments give you the most flexibility for budgeting and produce a very similar total as quarterly. The marginal difference is small. Choose the frequency that matches your expense pattern.