# Immediate Annuity Calculator

URL: https://speedycalculator.com/calculators/finance/immediate-annuity/
Last updated: 2026-10-25

> The immediate annuity calculator works out the income an immediate annuity (SPIA) could pay from a lump-sum premium – monthly, quarterly or yearly – for a fixed period, and the total paid out.

## Inputs

- Amount invested (premium)
- Payout frequency
- Payouts made at
- Payout period (years, months)
- Annual rate of return (%)

## Results

- Number of payouts
- Payout per period
- Total payout
- Interest earned
- Yearly payout as a share of the premium

## Formula

```
Payment = premium × i ÷ ((1 − (1 + i)^−n)(1 + i × timing)), i = rate per payment period
Total payout = payment × n
```

## Explanation

An immediate annuity converts a lump sum into income starting right away. Life annuities from insurers also pool longevity risk, so they pay more than this period-certain estimate for older buyers – but your money is locked in.

### How to use the Immediate Annuity Calculator

- **Amount invested (premium)**
- **Payout frequency**
- **Payouts made at**
- **Payout period**
- **Annual rate of return**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the amount invested, the payout frequency and timing, the payout period and the rate of return.

### 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

FieldWhat to enterAmount invested (premium)Amount in your currencyPayout frequencyChoose one: Monthly, Semi-monthly, Bi-weekly, Weekly …Payouts made atChoose one: End of each period, Beginning of each periodPayout periodUnits: years, monthsAnnual rate of returnIn %

### What each result means

- **Number of payouts** = round([Payout period]×[Payout frequency])
- **Payout per period** = pmt([Rate per period], [Number of payouts], [Amount invested (premium)], 0, [Payouts made at])
- **Total payout** = [Payout per period]×[Number of payouts]
- **Interest earned** = [Total payout] - [Amount invested (premium)]
- **Yearly payout as a share of the premium** = [Payout per period]×[Payout frequency]÷[Amount invested (premium)]×100

### Example values

How the main result changes when **Amount invested** changes and everything else stays at the example values above:

Amount invested (premium)Payout per period100,000659.96150,000989.93200,0001,319.91250,0001,649.89300,0001,979.87400,0002,639.82

## Worked example

Inputs — Amount invested (premium): $200,000; Payout frequency: Monthly; Payouts made at: End of each period; Payout period: 20 years; Annual rate of return: 5 %.

Results — Number of payouts = 240; **Payout per period = $1,319.91**; Total payout = $316,778.75; Interest earned = $116,778.75; Yearly payout as a share of the premium = 7.92 %.

## FAQ

**What is an immediate annuity?**
An insurance contract that starts paying income within a year of purchase.

**What is a SPIA?**
A single premium immediate annuity – the most common type.

**Can I get my money back?**
Usually not after the free-look period; some contracts offer refund options.

**What formula does the Immediate Annuity Calculator use?**
Payment = premium × i ÷ ((1 − (1 + i)^−n)(1 + i × timing)), i = rate per payment period.


## Sources

- [FINRA – Annuities](https://www.finra.org/investors/investing/investment-products/annuities)