Annuity Payout Calculator
Work out the regular income a lump sum can pay out over a set number of years.
Results update as you type.
About this calculator
An annuity payout calculator turns a lump sum into a stream of equal payments that exhausts the balance over a chosen period, while the money still invested keeps earning interest. It answers "how much can I withdraw each month from my savings for the next N years?" — the core question in retirement drawdown planning.
It uses the annuity payment formula, PMT = PV × i ÷ (1 − (1 + i)^−n), where i is the return per period and n the number of payments — the same maths as a loan payment, only here you are the lender to yourself. For example, a 500,000 balance earning 5% a year paid monthly over 20 years supports about 3,300 a month; you draw roughly 792,000 in total, of which about 292,000 is interest earned on the shrinking balance.
Use it to plan a fixed-term drawdown from a pension pot or savings, to test how long a nest egg lasts at a given withdrawal, or to compare payout options. Because it assumes a steady return and a fixed end date, treat the result as a planning estimate — real returns vary, and running the balance to exactly zero leaves no cushion.
Frequently asked questions
How is the payout amount calculated?
It is the annuity payment formula PMT = PV × i ÷ (1 − (1 + i)^−n), the same maths as a loan payment. The balance earns interest between withdrawals, so total payouts exceed the starting balance.
Is this the same as a lifetime annuity from an insurer?
No. This is a fixed-term drawdown that runs the balance to zero over the period you choose. A lifetime annuity from an insurer instead pays until you die and prices in mortality, so its payout can differ.
What return rate should I assume?
Use a rate the remaining balance can realistically earn while invested — often a conservative mix, since a retiree cannot afford large losses mid-drawdown. A lower assumed return means a smaller safe payout, so err on the cautious side.
What happens if my investments return less than assumed?
The balance runs out before the end of the term, because each withdrawal is sized for the higher assumed return. That is the main risk of a fixed drawdown; a lower withdrawal or a flexible one that adjusts to actual returns reduces the chance of running dry.
Is a fixed-term drawdown safe for the whole of retirement?
Only if you are sure of the time horizon. Because it deliberately empties the balance by the end date, outliving the term leaves you with nothing. Many planners instead use a percentage-of-balance rule so income flexes and never fully depletes.
How is this different from the 4% rule?
The 4% rule fixes the first-year withdrawal at 4% of the pot and then raises it with inflation, aiming to last indefinitely. This calculator instead solves for the level payment that exactly exhausts the balance over the term you set, which can be higher than 4% for shorter periods.
API — use this calculator from code
Call this calculator as a free JSON endpoint — no key required. Send the field values below as query parameters or JSON. Read the full API docs →
Endpoint
GET https://calculator.free/api/v1/annuity-payout/curl
curl "https://calculator.free/api/v1/annuity-payout/?principal=500000&rate=5&years=20"JavaScript fetch()
const r = await fetch(
"https://calculator.free/api/v1/annuity-payout/?" + new URLSearchParams({
"principal": "500000",
"rate": "5",
"years": "20"
}));
const data = await r.json();
console.log(data.results);Results are estimates for general guidance only, not financial, medical or tax advice.