Annuity Payout Calculator

This calculator answers one narrow question well: if a lump sum must be paid out in equal installments over a fixed number of years at an assumed rate, how large is each payment? That structure is called a period certain or fixed-period payout. You choose the amount, the rate assumption, the payout frequency, and the length of the period. The formula returns a payment that exactly exhausts the balance, including interest, on the final payment date. Nothing is left over and nothing runs short, because the math is built to end at zero on schedule.

State the limit plainly: lifetime annuity payouts depend on insurer mortality tables and pricing and require an insurer illustration. A lifetime annuity keeps paying while the annuitant lives, which means the insurer must price how long payments might run across many lives, add the cost of that guarantee, and stand behind it for decades. This tool does not simulate lifetime income, does not estimate how long anyone will live, and does not reproduce insurer pricing. If a lifetime figure is what you need, request an illustration for the actual contract and use this page to understand the fixed-period mechanics underneath simpler payout choices. For a side by side view of payout structures, see the annuity payout comparison reference after you run your numbers here.

Immediate fixed-period. Payments begin with the first period. The starting balance is exactly the amount you entered, and the formula spreads it over the certain period. This is the cleanest way to see the trade the formula makes: a shorter period means larger payments and less total interest, while a longer period shrinks each payment and gives interest more time to accumulate. Change only the period in the calculator and watch the payment and total interest move in opposite directions.

Deferred fixed-period. A waiting period comes first. Under the convention stated on this page, the amount grows during deferral at the same rate you entered, compounded at the payout frequency, and no payments are made. The worked numbers in the FAQ show the effect: deferring $250,000 for 5 years at a hypothetical 5% grows the starting balance to about $320,839.67, and the monthly payment over a following 20 year period rises to about $2,117.40, with total payouts of about $508,175.96 and total interest of about $258,175.96 against the original amount. Those deferred figures are verified with the same formula, but remember what they are: the result of this page's growth convention. A real deferred contract credits interest by its own terms, which may differ in rate, timing, and fees.

Deferral is not free income. The higher later payment is bought with years of no payments at all, and with the risk that plans change during the wait. Compare total payouts and the payment start date together, never the monthly figure alone. And keep the scope in view: both structures here end on a fixed date. A lifetime contract replaces that fixed end date with a guarantee tied to a life, priced by the insurer. That is a different product question, answered by an insurer illustration, not by extending the years slider on this page.

Read the four outputs as a set. The payment per period is the cash flow. Total payouts show everything the lump sum turns into under your rate assumption. Total interest earned, defined here as total payouts minus the original amount entered, shows how much of that total is growth rather than your own money coming back, including growth during any deferral. The starting balance after deferral shows exactly what balance the payment formula was applied to, so you can reproduce the result by hand from the FormulaSection above.

On tax, keep it general: tax rules vary by jurisdiction, by whether the money sits in a registered or non-registered setting, and by contract details. Payments commonly blend returning principal with earnings, and those parts can be treated differently, but the exact treatment for your money is a contract and jurisdiction question. Do not plan spending from a pre-tax payment figure without confirming the after-tax treatment that applies to you. This page intentionally makes no jurisdiction-specific claims.

Use this tool for education and comparison of fixed-period structures, then take real decisions to real documents. If you are weighing an actual annuity, ask the insurer for an illustration showing the guaranteed payment, the period or life basis it rests on, fees and riders, and what happens on death during deferral and during payout. Compare that illustration against the fixed-period baseline you computed here. Where the two differ, the difference is the price and value of the guarantees this formula does not include. The annuity payout comparison reference is a useful next step for lining those structures up side by side.