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Annuity Payout Calculator

Calculate how much you can withdraw from an annuity balance over a fixed period.

Result

Monthly Payout
$1,514.95
Total Payout
$363,588.20
$400K$300K$200K$100K$0Remaining Balance - Yr 1: $242KRemaining Balance - Yr 2: $233KRemaining Balance - Yr 3: $224KRemaining Balance - Yr 4: $215KRemaining Balance - Yr 5: $205KRemaining Balance - Yr 6: $195KRemaining Balance - Yr 7: $184KRemaining Balance - Yr 8: $173KRemaining Balance - Yr 9: $162KRemaining Balance - Yr 10: $150KRemaining Balance - Yr 11: $137KRemaining Balance - Yr 12: $124KRemaining Balance - Yr 13: $111KRemaining Balance - Yr 14: $97KRemaining Balance - Yr 15: $82KRemaining Balance - Yr 16: $67KRemaining Balance - Yr 17: $51KRemaining Balance - Yr 18: $35KRemaining Balance - Yr 19: $18KRemaining Balance - Yr 20: $0Yr 1Yr 4Yr 7Yr 10Yr 13Yr 16Yr 19

About the Annuity Payout Calculator

Once an annuity moves from its accumulation phase to its payout phase, the question changes from 'how much will this grow to' to 'how much can I withdraw each month.' Our Annuity Payout Calculator answers that using your balance, rate, and desired payout period.

How It Works

The calculator treats your annuity balance like a loan being paid down - it applies the standard payment formula to spread your balance, plus ongoing interest, evenly across your chosen payout period, giving you a level monthly withdrawal amount that fully depletes the balance by the end of the term.

Formula & Methodology

This is the same amortization formula used for loan payments, just run in reverse: instead of a lender giving you a lump sum and you paying it back with interest, you're the one holding the lump sum, and the annuity 'pays it back' to you with interest layered on top of your own principal. That's why a longer payout period produces a smaller monthly amount and a shorter one produces a larger amount - it's structurally identical to how a shorter loan term produces a bigger monthly payment.

Step-by-Step: Calculating It By Hand

  1. 1Convert the annuity's annual rate to a monthly rate.
  2. 2Convert your chosen payout period in years to total months.
  3. 3Apply the standard amortization formula to your balance, monthly rate, and number of payout months to find the level monthly withdrawal.
  4. 4Multiply the monthly payout by the total number of months to see total income received over the payout period.

Examples

20-year payout

A $250,000 balance at 4% paid out over 20 years produces a level monthly payout in the low-to-mid $1,500s, with the balance fully depleted by the end of the period.

Shorter payout period

The same balance paid out over just 10 years produces a significantly higher monthly amount, since it's spread across fewer years.

Advantages

  • Shows the exact level monthly payout for any balance, rate, and time period
  • Useful for comparing different payout period lengths against your income needs
  • Works the same way real annuitization calculations are structured
  • Shows total payout received alongside the monthly figure

Common Mistakes

  • Choosing a payout period shorter than your expected lifespan, risking running out of income
  • Not considering a lifetime payout option, which trades a lower monthly amount for guaranteed income for life
  • Ignoring that inflation erodes the purchasing power of a level, non-adjusting payout over a long period
  • Not comparing this against systematic withdrawals from a regular investment account

Edge Cases to Watch For

  • A period-certain payout (like this one) stops entirely once the term ends, regardless of whether you're still alive - a lifetime payout option instead guarantees income for life but at a lower monthly amount for the same balance.
  • This fixed, level payout doesn't adjust for inflation, so its real purchasing power declines over a long payout period.
  • Some annuity contracts offer a period-certain-with-life-guarantee hybrid, which blends these two payout structures in ways this simple calculation doesn't model.
  • Withdrawals are typically taxed as ordinary income to the extent they represent earnings rather than a return of your original after-tax contributions.

Common Use Cases

  • Estimating monthly income from an annuity's payout phase
  • Comparing different payout period lengths
  • Planning retirement income alongside Social Security and other savings
  • Understanding an insurance company's annuitization quote
Written & fact-checked by the Calculateus TeamLast updated August 5, 2026How we verify our formulas

Frequently asked questions

Will the balance be fully depleted at the end of the payout period?

Yes - this calculates a fixed monthly payout that exactly amortizes the balance to zero over the period you specify, similar to a mortgage running in reverse.

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Conclusion

The payout period you choose is a real trade-off between higher monthly income now and running out later - many people blend a lifetime-payout annuity with other assets specifically to manage that risk. This calculator handles the level, fixed-period math; a financial advisor can help evaluate lifetime payout options.

References