Enter annuity assumptions
Example data table
These examples show how changing term length, return, and timing changes supported income.
| Scenario | Starting Balance | Return | Term | Frequency | Timing | Target Ending Balance | Illustrative Gross Payout |
|---|---|---|---|---|---|---|---|
| Retirement drawdown | $250,000 | 5.50% | 20 years | Monthly | End | $0 | About $1,720 |
| Income with reserve | $400,000 | 4.75% | 25 years | Quarterly | End | $50,000 | About $6,220 |
| Immediate income | $180,000 | 4.00% | 15 years | Monthly | Beginning | $0 | About $1,329 |
| Goal-seeking principal | Calculated | 6.00% | 18 years | Monthly | End | $25,000 | $2,000 target payout |
Formula used
Step 1: Convert the annual return to a payout-period rate.
Effective annual rate = (1 + nominal rate / compounding frequency)compounding frequency - 1
Periodic rate = (1 + effective annual rate)1 / payouts per year - 1
Step 2: Solve for the periodic payout.
Ordinary payout = [PV × (1 + r)n - FV] × r ÷ [(1 + r)n - 1]
Beginning-of-period payout = ordinary payout ÷ (1 + r)
Step 3: Solve for required starting balance when payout is known.
PV = payout × annuity factor + discounted ending balance
For beginning-of-period payouts, the annuity factor is multiplied by (1 + r).
Step 4: Build the schedule period by period.
Each row updates opening balance, earned interest, payout, estimated tax, net cash received, and the closing balance.
PV is the starting balance, FV is the target ending balance, r is the payout-period rate, and n is the total number of payouts.
How to use this calculator
- Select whether you want to estimate a payout or the balance needed.
- Enter the balance or desired payout, then provide the annual return assumption.
- Choose the compounding frequency, payout frequency, and number of years.
- Set payout timing to beginning or end of each period.
- Add an optional withholding estimate, inflation rate, and ending balance target.
- Press the calculate button to show the results above the form.
- Review the summary cards and amortization schedule for period-by-period details.
- Use the CSV or PDF buttons to save the output for planning notes.
Frequently asked questions
1. What does this annuity payout calculator estimate?
It estimates either the income a balance can support or the starting balance needed for a target payout. It also builds a detailed payout schedule.
2. Why does payment timing matter?
Beginning-of-period withdrawals leave less money invested during each period, so the supported payout usually differs from end-of-period withdrawals.
3. What is the target ending balance used for?
It lets you preserve part of the annuity by the end of the payout term. A higher target ending balance generally lowers the supported payout.
4. Why are compounding and payout frequencies separate?
Some products compound monthly while paying quarterly or yearly. Separating them gives a more realistic payout estimate when cash flow timing differs.
5. Does the calculator include taxes?
It applies a flat withholding estimate to each payout for planning purposes. Actual tax treatment depends on contract type, jurisdiction, basis, and other factors.
6. What does the inflation-adjusted payout show?
It converts future net payouts into today’s purchasing power using your inflation assumption. This helps compare early and late income more realistically.
7. Can I use this for retirement income planning?
Yes. It is useful for retirement planning, structured withdrawals, and income projections. Use it as an estimate, not as formal investment or tax advice.
8. Why might my provider quote a different payout?
Providers may use different mortality assumptions, fees, riders, guarantees, settlement options, or market rates. Those product-specific details can change actual payouts.