Annuity Monthly Payout Calculator
Calculate your monthly annuity payout from a lump sum. Enter principal, annual rate, and payout years to estimate income, total received, and interest earned.
See step-by-step calculation
When to use this calculator
- Estimate monthly income from a pension lump-sum buyout
- Plan withdrawals from a 401(k) or IRA rollover through retirement
- Compare payout duration: 15, 20, or 30 years from the same principal
- Model how interest rate changes affect your monthly retirement check
- Determine whether a lump sum or annuity contract offers better value
- Project total interest earned during the drawdown phase
Annuity Payout Examples by Rate & Duration (Ordinary Annuity, $500,000 Lump Sum)
| Annual Rate | Payout Period | Monthly Rate (r_m) | Total Months (n) | Monthly PMT | Total Received | Interest Earned |
|---|---|---|---|---|---|---|
| 0.00% | 10 years | 0.00000% | 120 | $4,166.67 | $500,000 | $0 |
| 0.00% | 25 years | 0.00000% | 300 | $1,666.67 | $500,000 | $0 |
| 3.00% | 10 years | 0.25000% | 120 | $4,827.84 | $579,341 | $79,341 |
| 3.00% | 25 years | 0.25000% | 300 | $2,371.61 | $711,483 | $211,483 |
| 5.00% | 10 years | 0.41667% | 120 | $5,303.28 | $636,394 | $136,394 |
| 5.00% | 25 years | 0.41667% | 300 | $2,922.06 | $876,617 | $376,617 |
| 7.00% | 10 years | 0.58333% | 120 | $5,805.36 | $696,643 | $196,643 |
| 7.00% | 25 years | 0.58333% | 300 | $3,533.64 | $1,060,093 | $560,093 |
Fuente: present-value ordinary annuity formula PMT = PV × r_m / (1 − (1 + r_m)^−n) as defined in this calculator. 0% case uses PMT = PV / n. The 5%/25-year row matches the worked example provided in the calculator content. Values rounded to the nearest dollar except PMT (cents). No fees, taxes, or inflation adjustment included.
How it works
What is an annuity payout?
An annuity payout is a fixed monthly income amount withdrawn from a lump sum over a set period, calculated using present-value formulas. For example, a $500,000 principal earning 5% annually yields $2,387 monthly for 25 years. This ensures your nest egg lasts exactly as long as planned.
How It Works
This calculator applies the present-value ordinary annuity formula to compute a fixed monthly withdrawal that exactly depletes a lump sum over a chosen number of months, assuming a constant interest rate earned on the remaining balance.
Formula
PMT = PV × r_m / (1 − (1 + r_m)^(−n))
Where:
PV = present value (lump sum, $)
r_m = monthly interest rate = annual_rate / 12 / 100
n = total payment periods = payout_years × 12
PMT = fixed monthly payment ($)Special case — 0% interest: When annual_rate = 0, the formula simplifies to PMT = PV / n (straight division with no interest component).
Worked Example
| Input | Value |
|---|---|
| Lump sum (PV) | $500,000 |
| Annual rate | 5.00% |
| Monthly rate (r_m) | 0.41667% |
| Payout years | 25 (n = 300 months) |
PMT = 500,000 × 0.0041667 / (1 − (1.0041667)^(−300))
= 2,083.33 / (1 − 0.2872)
= 2,083.33 / 0.7128
≈ $2,922.06 / month(Note: exact value depends on full floating-point precision — use the calculator above for the precise figure.)
| Output | Value |
|---|---|
| Monthly payout | $2,922.06 |
| Total received (300 × PMT) | $876,617 |
| Interest earned | $376,617 |
Age-Based Mode
If you select Current age & target end age, the calculator computes payout_years = end_age − current_age. For example, starting payouts at age 65 and targeting age 90 gives 25 years — identical to typing 25 directly.
Limitations & When NOT to Use This Calculator
Frequently asked questions
What is an annuity payout?
What interest rate should I enter?
How many years should I plan for?
What happens if I enter 0% as the interest rate?
Is this the same as a pension annuity from an insurance company?
How does inflation affect my monthly payout?
Can I use this for a 401(k) or IRA withdrawal plan?
What is the difference between total received and interest earned?
Does the payment timing matter (annuity-due vs. ordinary annuity)?
What if I want to leave a residual balance at the end?
Sources & references
- Social Security Administration — Period Life Table 2021 — U.S. Social Security Administration (2024)
- IRS — Required Minimum Distributions (RMDs) — Internal Revenue Service (2026)
- CFP Board — Retirement Income Planning Standards — Certified Financial Planner Board of Standards (2025)
- NAIC — Annuity Buyer's Guide — National Association of Insurance Commissioners (2025)
Methodology & trust
Calculadora de finanzas revisada por el equipo editorial de Hacé Cuentas, contrastada con Social Security Administration — Period Life Table 2021, según nuestra política editorial y metodología.
Última revisión: June 20, 2026. Los parámetros se verifican periódicamente con las fuentes citadas.
Calculations run 100% in your browser. We do not store or transmit your data.
Indicative results. For critical decisions, consult a professional.
Rodríguez, M. (2026). Annuity Monthly Payout Calculator. Hacé Cuentas. https://hacecuentas.com/annuity-payout-monthly-calculator
Contenido bajo licencia CC-BY 4.0 — reutilizable citando la fuente con enlace a Hacé Cuentas.