Calculate the monthly payout from a fixed annuity based on your principal, interest rate, and payout period.
An annuity calculator estimates the fixed monthly payout you could receive from a lump sum of money, spread over a chosen payout period at an assumed interest rate. This models how a fixed annuity works: you pay a lump sum (the principal) to an insurance company or fund, and in exchange receive a guaranteed series of payments over time, during which the remaining balance continues to earn interest until it's fully paid out.
This calculator works like a loan amortization formula in reverse: the principal is treated as a balance that's paid down over the payout period, with interest credited each month on the remaining balance before the payout amount is subtracted.
Formula: Monthly Payout = [Principal × monthly rate] / [1 − (1 + monthly rate)−total months], where monthly rate = annual interest rate ÷ 12, and total months = payout years × 12.
Example: A $100,000 principal at a 5% annual interest rate (example rate — enter your expected rate) paid out over 20 years produces a monthly payout of roughly $660, for total payments of about $158,000 over the period — meaning roughly $58,000 of the total comes from interest earned on the remaining balance along the way. (Note: all figures in this example are for illustration purposes only and do not represent an actual annuity quote.)
Annuities are insurance products designed to provide a steady income stream, often used as part of retirement income planning. A "fixed annuity" like the one modeled here pays a guaranteed rate, while other types — variable annuities, indexed annuities — tie returns to market performance with varying levels of risk and complexity. Annuities can also be "immediate" (payouts begin right away) or "deferred" (the principal grows for a period before payouts begin). Actual annuity rates and terms vary significantly between insurance companies and products, and often include fees, surrender charges, and other terms not modeled in this simplified calculator (example rate used in this calculator — get an actual quote from an annuity provider for accurate figures).
A fixed annuity is an insurance product where you pay a lump sum (or series of payments) in exchange for a guaranteed series of payments, often used to provide steady income in retirement. This calculator models the basic math of a fixed annuity payout.
The default 5% is an example only. Actual annuity rates vary by insurance company, product type, and market conditions, and may be lower or higher than this example. Get an actual quote from an annuity provider for accurate figures.
An immediate annuity begins making payments right away after you pay the principal. A deferred annuity allows the principal to grow for a period of time before payments begin. This calculator models the payout phase only.
No. This calculator shows a simplified calculation based on principal, interest rate, and payout period only. Real annuity contracts often include fees, surrender charges for early withdrawal, and optional riders that affect the actual payout.
A longer payout period results in smaller monthly payments but more total interest earned over the life of the annuity, since the remaining balance continues earning interest for longer before being fully paid out.
An annuity can provide an additional guaranteed income stream alongside Social Security, a pension, or withdrawals from retirement accounts like a 401(k) or IRA — many people use a combination of sources to cover retirement expenses.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only. All rates and examples shown are sample values and do not represent an actual annuity quote, which would depend on the specific insurance company, product, fees, and terms. Financial rules and regulations change frequently. Always consult a qualified financial advisor before making any financial decisions.