Annuity Calculator
Turn a lump sum into a guaranteed paycheck. See the monthly income a fixed annuity pays, your total payout, and how much of it is interest.
A $500,000 premium at 5% pays about $3,300/mo for 20 years — $791,947 in total, 1.58× what you put in.
$3,300
monthly income from a $500,000 premium at 5% over 20 years
1.58×
total payout as a multiple of the premium you put in
$291,947
interest earned on top of your premium over the payout period
How an annuity turns savings into income
A fixed annuity trades a lump sum for a stream of guaranteed payments.
A lump sum becomes income
An annuity turns savings into a predictable paycheck. Hand over a premium, and the insurer pays you a level amount on a schedule — $3,300/mo in the example — while crediting interest on the unpaid balance.
Length is the key trade-off
A shorter payout period means larger monthly checks but for fewer years; a longer period spreads smaller payments across more time. The payout-by-length chart makes the trade-off concrete so you can match it to your needs.
Certainty has a cost
The appeal of a fixed annuity is a guaranteed payment you can't outlive (for lifetime versions). The trade-offs are limited liquidity, possible surrender charges, and fees — so weigh it against keeping the money invested yourself.
How the Annuity Calculator Works
Formula
Monthly payout = P · r / (1 − (1 + r)^−n)
P = premium, r = rate ÷ 12, n = payout years × 12
(When r = 0: payout = P ÷ n)
Total payout = monthly payout × n
Interest earned = total payout − premiumEnter your premium
The lump sum you'd pay into the annuity.
Enter the crediting rate
The annual rate the annuity earns.
Choose a payout length
How many years it should pay you.
See your income
Monthly and annual payout, plus the total.
Compare payout lengths
The chart shows how the term changes the check.
A fixed period-certain annuity converts a lump sum into a guaranteed income stream. The math mirrors a loan: the insurer "amortizes" your premium back to you with interest. In the example, $500,000 at 5% over 20 years pays $3,300/mo and returns $791,947 in total — 1.58× the premium, with $291,947 of that being interest.
Annuities are a tool for turning savings into predictable income, especially in retirement. The main trade-offs are liquidity (your money is locked up), fees and surrender charges, and inflation risk on fixed payments. This calculator models a simple fixed annuity for illustration — compare real quotes and product types before committing, and consider speaking with a fee-only advisor.
Frequently Asked Questions
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