💰 Annuity Payout Calculator

Note: Calculations are performed in your selected currency. The final result is an estimate.

📘 How This Calculator Works

This calculator determines the fixed periodic payout amount for an annuity using the present value of an annuity formula. It calculates how much you can withdraw regularly from a lump sum investment over a specified period, considering a constant interest rate.

Formula Used: Payment = P * (r / (1 - (1 + r)^(-n)))

If the interest rate is 0%, the formula simplifies to: Payment = P / n

❔ Frequently Asked Questions

What is an annuity payout?
An annuity payout refers to a series of regular payments made from an investment or insurance product, often used as a source of retirement income. It provides a steady cash flow over a predetermined period.
How is the annuity payout calculated?
The payout is calculated using the present value of an annuity formula, which factors in your initial investment (principal), the annual interest rate, the number of years you want payments to last, and how often you want to receive payments (monthly, quarterly, yearly).
What's the difference between an annuity and a lump sum?
A lump sum is a one-time payment of the entire amount. An annuity provides a guaranteed stream of income over time, which can help manage longevity risk (outliving your savings).
Can I change the payout frequency after I start receiving payments?
Typically, the payout frequency is set when you purchase the annuity contract and cannot be changed. This calculator helps you choose the right frequency upfront for your financial needs.
Does this calculator account for taxes or fees?
No, this calculator provides a pre-tax estimate and does not account for any potential management fees, administrative costs, or taxes owed on the investment gains withdrawn.
What is a realistic interest rate for an annuity?
Interest rates vary based on the type of annuity and market conditions. Fixed annuities might offer 2-5%, while variable annuities are tied to market performance. Historical averages are not a guarantee of future returns.
What happens if my annuity runs out of money?
This calculator assumes the annuity is structured to be fully depleted by the end of the payout period. Some annuities offer lifetime guarantees, which would require a different calculation not covered here.