See the monthly income a lump sum can provide over a set number of years.
Calculated locally in your browser.
How is an annuity payout calculated?
Payment = P × r ÷ (1 − (1 + r)⁻ⁿ), where r is the monthly interest rate and n the number of monthly payments. This models a self-funded drawdown while the balance keeps earning interest. For example, 500,000 at 5% paid out over 20 years provides roughly 3,300 per month. A commercial annuity may pay differently after fees.
Understanding your result
This models a self-funded drawdown. A commercial annuity may pay differently after fees and guarantees.
Formula and method
Payment = P × r ÷ (1 − (1 + r)⁻ⁿ), where r is the monthly rate and n the number of monthly payments.
Worked example
500,000 at 5% paid out over 20 years provides roughly 3,300 per month.
How to use this tool
- Enter the starting amount.
- Enter the annual interest rate and payout period.
- Press Calculate.
About the Annuity Payout Calculator
The Annuity Payout Calculator estimates the steady monthly income a lump sum can pay out over a chosen number of years while the balance keeps earning interest.
Frequently asked questions
Does the money run out?
Yes — this calculation fully draws the balance down to zero over the chosen period. A perpetual income would pay less.