Annuity payout calculator
How much a lump sum can pay you each month, or how long it will last.
About this calculator
This annuity payout calculator shows how much monthly income a lump sum can provide, or how long it will last if you take out a set amount each month.
It's useful for planning retirement income from savings, a pension pot or an inheritance.
How it works
A payout is a loan in reverse: the balance earns interest each month and a level payment comes out. The payment that empties it in exactly n months uses the same formula as a loan payment.
Last reviewed:
Worked example
- Work out: Monthly income for a set time
- Starting balance: $300,000
- Interest rate: 4% a year
- Pay out over: 25 years
Monthly income: $1,583.51 (for 25 yr)
Common questions
How long will my savings last in retirement?
It depends on the withdrawal, the return and inflation. Choose How long the money lasts and enter your monthly withdrawal to see.
What is the 4% rule?
A guideline that withdrawing about 4% of your savings in the first year, then adjusting for inflation, has historically lasted around 30 years. It's a rough guide, not a guarantee.
Is this the same as buying an annuity?
Not exactly. An insurance annuity can pay for life, however long you live, but rates and fees vary. This calculator shows a payout from your own savings.
Sources and further reading
The story behind it
Where the idea came from: The word annuity comes from the Latin annuus, yearly. Roman citizens could buy lifetime yearly payments called annua.
Selling regular income for a lump sum is one of the oldest financial deals, used by Roman citizens, medieval towns and modern pension funds. The maths is the same as a mortgage, run in reverse.
Why you can trust this calculator
- It runs in your browser. Nothing you type into it is sent anywhere.
- The method is explained on this page, so you can check it yourself.
- Free to use, with no sign-up.
- Results are estimates, not financial advice.
- Spotted a mistake? Tell us and we'll look into it.
After 15 years as a mathematics educator, I built CalculStore to give students, teachers, professionals and anyone working with numbers simple, reliable tools.
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