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Annuity Calculator

Project the accumulation phase of a deferred annuity, then calculate the level monthly or annual payment a lump sum supports during the payout phase.

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years

0 = immediate annuity

years
%

Rate used to amortize the balance into payments

Payout frequency
Balance at Annuitization
$100,000
Monthly Payment
$605.98
Total Payout
$145,435
An immediate annuity funded with $100,000 starts paying out right away. Over 20 years of payouts at a 4% rate, that supports a monthly payment of $605.98, totaling $145,435 — of which $45,435 is interest earned during the payout phase.
Monthly Payment$605.98

How the payout is calculated

The payout phase amortizes your balance into level payments — exactly like a loan paid to you instead of by you:

Payment = Balance × r(1+r)^n ÷ ((1+r)^n − 1)

Where r is the per-period rate and n is the number of payments. For example, a $100,000 immediate annuity paying out over 20 years at a 4% rate supports a monthly payment of $605.98, totaling $145,435 over the full term.

Frequently asked questions

What is an annuity?

An annuity is a contract, typically with an insurance company, where you pay a lump sum (or series of payments) in exchange for a stream of guaranteed income, either immediately or starting at a future date.

What's the difference between an immediate and a deferred annuity?

An immediate annuity starts paying out right after you fund it — set the deferral period to 0. A deferred annuity has an accumulation phase first, where your money (plus any extra contributions) grows before payouts begin.

Are annuity payments guaranteed for life?

It depends on the contract. A 'period certain' annuity (modeled here) pays a fixed amount for a set number of years. A 'life annuity' instead pays for as long as you live, which insurers price using mortality tables rather than a fixed term.

Are annuity payments taxed?

In the US, the portion of each payment that represents your original premium (already taxed) is generally tax-free, while the growth/interest portion is taxed as ordinary income — unless the annuity is held inside a tax-advantaged account like an IRA, in which case the whole payment is taxed as ordinary income on withdrawal.

What fees do annuities typically charge?

Many annuities, especially variable and indexed annuities, charge annual fees, mortality and expense (M&E) charges, and surrender charges for early withdrawal. This calculator models a simple fixed annuity without those extra fees — always check the actual contract terms.