Annuity Payout Calculator
See the monthly payout a lump sum can provide over a set number of years before it runs out.
How it works
Payout = P × r ÷ (1 − (1 + r)^−n), where r = annual return ÷ 12 and n = months
A fixed-period annuity payout works exactly like a loan payment in reverse: your principal is “lent” back to you as level monthly payments, and the remaining balance keeps earning the return until it hits zero at the end of the term. A higher return or a shorter payout period both raise the monthly amount.
Worked example
A $500,000 balance earning 5% paid out over 25 years provides about $2,923 a month. That is roughly $876,800 paid out in total, including about $376,800 of earnings along the way.
Frequently asked questions
Is this the same as the 4% rule?
Not quite. This depletes the balance to zero over a fixed period. The 4% rule aims to make a portfolio last indefinitely, so it allows a smaller withdrawal — around 4% of the starting balance.
Does it account for inflation?
No — the payout is a level dollar amount, so its buying power falls over time. For steady purchasing power, use a lower return assumption or reduce the payout.
What return should I assume for a payout?
A conservative one, since the money is being spent down and cannot recover from a bad stretch. Retirees often assume 3–5% on a cautious mix.
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This is an educational estimate, not financial advice. Confirm figures with your lender, advisor or tax professional.