Annuity Payout Calculator

It is the sum of every monthly payment over the full term, which includes both a return of your original principal and the interest that principal earns along the way as the balance shrinks toward zero. Since it is not discounted back to today's dollars, it will always look larger than the lump sum you started with whenever the rate is above zero.

Not exactly. An insurer's payout also factors in mortality pooling, where healthier or shorter-lived annuitants effectively subsidize those who live longer, plus the company's own fees and profit margin, none of which this tool models. Treat this as a transparent, fixed-term withdrawal estimate rather than a number you can compare dollar-for-dollar against a real annuity contract.

No, the monthly amount stays fixed in nominal dollars for the entire term, so its real purchasing power erodes in every year that prices rise. Anyone relying on this for decades of income would need to assume a rate that outpaces expected inflation or plan for periodic increases the calculator itself does not build in.

Spreading the same principal and its accumulated interest across more years means each individual payment carries a smaller share of the total — the identical relationship that makes a 30-year mortgage payment lower than a 15-year one against the same loan balance. The tradeoff is that a longer term also draws out more cumulative interest before the balance finally reaches zero.

A fixed-term payout fits situations with a known end date, such as bridging income until a pension or Social Security begins, funding a set number of years of college, or sizing up what a lump-sum settlement could generate against other uses of the same money. A lifetime annuity earns its keep specifically when the risk being managed is outliving your savings, not hitting a fixed schedule.