Annuity Payout Calculator
What regular income a lump sum can pay for a set number of years — and how long it lasts at a given withdrawal.
This is the future-value formula rearranged for the payment: given a balance, a return and a number of years, what can it pay out each period until it runs out? The result is a fixed nominal payment, which loses purchasing power every year.
How the annuity payout calculator works
This is the future-value formula rearranged for the payment: given a balance, a return and a number of years, what can it pay out each period until it runs out?
The result is a fixed nominal payment, which loses purchasing power every year. The inflation-adjusted row shows what the same payment is worth in today's money at the end of the term — usually a considerably smaller figure than people expect.
The other direction matters more in practice: enter what you want to draw and see how long the balance survives. The gap between "lasts 30 years" and "lasts forever" is narrow, and it sits right around the point where the withdrawal equals the return.
Formula: PMT = PV·r / (1 − (1+r)⁻ⁿ)
Worked examples
| Inputs | Payment each period | Note |
|---|---|---|
| 500,000 over 25 years at 5% | $2,890.69 | about 2,900 a month |
| Drawing 3,000 a month instead | $2,890.69 | how long it lasts |
| A draw that never touches capital | $2,890.69 | lasts indefinitely |
FAQFrequently asked questions
How much income will my savings produce?
It depends on the return and how long it must last. 500,000 at 5% over 25 years pays about 2,900 a month before tax.
What draw lasts forever?
One equal to the return itself — the balance never falls. That is the perpetual figure shown.
Does this account for inflation?
The payment is fixed in nominal terms. The row showing its value in today's money at the end of the term is the honest measure of what that costs you.
Is this the same as the 4% rule?
Related but not the same. The 4% rule is an empirical result about surviving bad market sequences; this is the arithmetic for a fixed assumed return.
What about tax?
Not included. Whether a withdrawal is taxed depends on the account type and your market, which is what the hand-built pages for each market cover.
Where these figures come from
- CFA Institute — Quantitative Methods: The Time Value of Money — the discounting, annuity and IRR conventions used here
- US Federal Reserve — Regulation Z (Truth in Lending), APR calculation — why APR includes fees where a nominal rate does not
- Consumer Financial Protection Bureau — the US consumer finance regulator
Last checked: September 2026. These are the standard textbook formulas; the conventions named are those of the CFA Institute curriculum and ISO 80000 usage.