See how much income a lump sum can pay. This free annuity calculator estimates your monthly payout, total payout and interest earned from a starting amount over any number of years.
Results update automatically as you type. A fixed-period payout estimate — actual annuity products vary.
Use this free annuity calculator to see how much income a lump sum can pay out over time. Enter your starting amount, an interest rate and a payout period to find your monthly income, total payout and interest earned.
An annuity calculator turns a lump sum into a stream of income. Enter your starting amount, the interest rate it earns and how many years you want it to last, and it returns your monthly payout, annual payout, total payout and the interest earned while the balance is drawn down.
It’s useful for planning retirement income — working out how much a savings pot could safely pay you each month over a set number of years.
Payment = P × i ÷ [ 1 − (1 + i)−n ]
Where P is your starting amount, i is the monthly interest rate, and n is the number of monthly payments. The remaining balance keeps earning interest, which is why total payouts exceed your original principal. A $500,000 sum at 5% over 20 years pays about $3,300 a month.
| Term | What it means |
|---|---|
| Annuity | A financial product that pays a regular income. |
| Principal | The lump sum you start with. |
| Payout period | How long the income payments last. |
| Annuitization | Converting a lump sum into a stream of payments. |
| Fixed vs variable | Guaranteed payouts versus market-linked ones. |
It uses Payment = P × i ÷ [1 − (1 + i)−n], where P is your starting amount, i is the monthly interest rate, and n is the number of monthly payments. The remaining balance keeps earning interest as it's paid out.
It depends on the rate and period. At 5% over 20 years, a $500,000 lump sum pays roughly $3,300 a month. A longer payout period or lower rate reduces the monthly amount.
A fixed annuity pays a guaranteed, steady amount, while a variable annuity's payments rise and fall with the performance of underlying investments.
Annuitization is the process of converting a lump sum into a stream of regular income payments over a set period or for life.
Because your remaining balance continues earning interest while it's being paid out, so the total of all payments is larger than the amount you started with.
Yes, this annuity calculator is completely free, needs no sign-up, and gives instant results directly in your browser.