Finance

Annuity Payout Calculator

Estimate a fixed periodic payout that can be sustained from a starting balance over a chosen term and assumed annual return.

Last reviewed: April 30, 2026Free toolMethodology

Annuity Payout Calculator

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These fields start with sample inputs. Keep them or replace them, then run the tool to show a fresh result.

Number fields accept plain values and common formatted input such as 250000, 250,000, or 1,234.56.

Result

Calculating the sample result.

Why it matters

Annuity-style payout math helps users translate a lump sum into a steady withdrawal amount, which is common in retirement and distribution planning.

When to use

  • Testing withdrawal scenarios from a fixed balance
  • Comparing term lengths for a payout plan
  • Estimating a level drawdown amount over a set horizon

Inputs & Outputs

Inputs

  • Starting balance is the amount available to fund the payout stream.
  • Annual return is the assumed rate earned while the balance is being drawn down.
  • Years is the payout term.

Outputs

  • Annual payout shows the fixed amount that could be withdrawn each year under the assumptions.
  • Monthly equivalent converts the annual payout into a simpler budgeting number.

Level-payout annuity formula

Use the standard annuity payment formula in reverse: treat the starting balance as present value and solve for the constant payment over the selected number of years.

Payout = PV x r / (1 - (1 + r)^-n)

Worked example

1

Fixed-term drawdown

A 400,000 balance is expected to earn 4% annually and support payouts for 20 years.

Inputs

  • Starting balance: 400,000
  • Annual return: 4%
  • Years: 20

Steps

  • Apply the annuity payout formula across the 20-year term

Result

  • The calculator estimates the annual and monthly payout the balance could support.

Edge cases & caveats

  • A stable annual return is assumed.
  • This is a planning model and not a product quote or withdrawal recommendation.

Frequently Asked Questions

Why does a higher return assumption increase payout?

Because more of the withdrawal can be supported by growth rather than principal depletion.

Can I use this for retirement income planning?

Yes, as a simple estimate. It does not replace a full withdrawal analysis that considers taxes, volatility, and longevity.

Keep going

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