Retirees use payout calculations to turn savings into income. A longer payout period or a higher final balance lowers the withdrawal. Remember inflation: a fixed payout loses buying power each year.
How to use the Annuity Payout Calculator
- Starting balance
- Annual interest rate
- Payout frequency
- Payouts made at
- Payout length
- Balance left at the end
- Or: fixed withdrawal per period
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter the starting balance, interest rate, payout frequency, timing and length, and any balance to leave at the end – or a withdrawal amount to see how long it lasts.
Tips
- Start early – time does more of the work than the amount you save.
- Take the full employer match if your plan offers one.
- Plan with a cautious return (4–6% after inflation) and check again every year.
- Know the contribution limits and required minimum distribution rules for your accounts.
Common mistakes to avoid
- Ignoring inflation when setting a retirement target.
- Underestimating how long retirement can last.
- Withdrawing early and paying penalties and taxes.
Inputs explained
| Field | What to enter |
|---|---|
| Starting balance | Amount in your currency |
| Annual interest rate | In % |
| Payout frequency | Choose one: Monthly, Semi-monthly, Bi-weekly, Weekly … |
| Payouts made at | Choose one: End of each period, Beginning of each period |
| Payout length | Units: years, months |
| Balance left at the end | Amount in your currency |
| Or: fixed withdrawal per period | Amount in your currency |
What each result means
- Number of payouts = round([Payout length]×[Payout frequency])
- Withdrawal per period = pmt([Rate per period], [Number of payouts], [Starting balance], [Balance left at the end], [Payouts made at])
- Total withdrawals = [Withdrawal per period]×[Number of payouts]
- Interest earned during the payout = [Total withdrawals] + [Balance left at the end] – [Starting balance]
Example values
How the main result changes when Starting balance changes and everything else stays at the example values above:
| Starting balance | Withdrawal per period |
|---|---|
| 250,000 | 1,461.48 |
| 375,000 | 2,192.21 |
| 500,000 | 2,922.95 |
| 625,000 | 3,653.69 |
| 750,000 | 4,384.43 |
| 1,000,000 | 5,845.9 |
Formula
Withdrawal = (B − F ÷ (1 + i)^n) × i ÷ ((1 − (1 + i)^−n)(1 + i × timing))Length for a fixed withdrawal = nper(i, withdrawal, B) periodsWorked example
Inputs — Starting balance: $500,000; Annual interest rate: 5 %; Payout frequency: Monthly; Payouts made at: End of each period; Payout length: 25 years; Balance left at the end: $0; Or: fixed withdrawal per period: $3,000.
Results — Number of payouts = 300; Withdrawal per period = $2,922.95; Total withdrawals = $876,885.06; Interest earned during the payout = $376,885.06; How long the fixed withdrawal lasts = 23.8 years; Will the fixed withdrawal run out? = Yes – see how long it lasts.
Frequently asked questions
How much will an annuity pay out?
It depends on the balance, rate and payout length – $500,000 at 5% over 25 years pays about $2,900 a month.
What happens if the balance runs out?
Payouts stop; lifetime insurance annuities avoid this.
Should I leave a final balance?
If you want a legacy or a safety buffer.
What formula does the Annuity Payout Calculator use?
Withdrawal = (B − F ÷ (1 + i)^n) × i ÷ ((1 − (1 + i)^−n)(1 + i × timing)).