How this annuity payout calculator works
The calculator uses the starting balance, residual value, payment frequency, payment timing, fixed interest-rate assumption and number of payments to estimate a payment per period. Ordinary annuity timing assumes payments are taken at the end of each period. Annuity due timing assumes payments are taken at the beginning.
Starting balance, residual value and payment timing
Starting balance is the lump sum used for the estimate. Residual value is the amount you want left at the end of the term. Payment timing changes the result because beginning-of-period payments happen before that period's interest is applied.
What this does not include
This calculator provides a general estimate using simplified annuity maths. It is not a quote for a lifetime annuity or insurance product. It does not include insurer pricing, mortality assumptions, rider costs, surrender charges unless entered, taxes, inflation adjustments, commissions, product-specific caps, participation rates, state rules, or personal financial advice.
Key terms and assumptionsStarting balance, residual value, fixed rate, payment frequency, ordinary annuity timing, annuity due timing and estimate limits.
- Starting balance
- Starting balance is the lump sum used for the fixed-term estimate.
- Residual value
- Residual value is the amount assumed to remain at the end of the term. A residual value of 0 estimates spending down the balance.
- Fixed interest rate
- Annual interest rate is treated as a fixed assumption and divided by the payment frequency for the periodic rate.
- Payment frequency
- Monthly, quarterly, semiannual and annual frequencies are supported. Frequency is also used as the compounding period in this simplified estimate.
- Ordinary annuity
- Ordinary annuity timing assumes each payment happens at the end of the period.
- Annuity due
- Annuity due timing assumes each payment happens at the beginning of the period.
- General estimate
- This calculator uses simplified fixed-term annuity maths and excludes insurance pricing, mortality assumptions, taxes, fees, inflation and personal financial advice.
Guides and methodology
Plain-English notes that explain the assumptions behind related calculators and tools.
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FAQs
What is this annuity payout calculator estimating?
It estimates a fixed payment amount supported by a starting lump sum over a set term, using the interest rate, payment frequency, timing and residual value entered.
Is this a lifetime annuity quote?
No. It is simplified fixed-term annuity maths, not a lifetime annuity quote, insurance product quote or product recommendation.
What is the difference between ordinary annuity and annuity due?
An ordinary annuity assumes payments happen at the end of each period. An annuity due assumes payments happen at the beginning of each period.
What interest rate should I use?
Use the fixed rate assumption you want to test. The calculator does not choose a rate or confirm that a provider would offer it.
Does this include taxes or surrender charges?
No. It does not include taxes, surrender charges, fees, commissions, product-specific rules or withdrawal restrictions unless you adjust the inputs yourself.
Why might an insurance annuity quote differ?
Insurance quotes can include mortality assumptions, insurer pricing, product features, riders, fees, commissions, state rules and other contract-specific details that this calculator does not model.