Annuity Payout Calculator
Calculate monthly payouts from a retirement annuity based on your lump sum, interest rate, and payout period.
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Annuity Payout Planning
An annuity payout calculator determines how much you can withdraw periodically from a lump sum while accounting for interest earned on the remaining balance. The balance reaches zero at the end of the payout period.
What is the Annuity Payout Calculator?
The Annuity Payout Calculator shows retirees exactly how much income they can withdraw from their investments each month before the account runs dry. It is commonly used to structure lotto winnings or structured legal settlements.
How It Works (Algorithm)
The tool uses the Time Value of Money to balance "drawdown" against "growth". While you are pulling money out every month to live on, the remaining balance in the account continues to earn interest. The calculator finds the mathematical equilibrium between the two.
$$ PMT = PV \times \frac{r}{1 - (1+r)^{-n}} $$
Calculates the maximum sustainable payout from a declining principal.
How to Use It
Enter the total starting principal of your retirement account or settlement. Enter the expected annual interest rate it will earn. Finally, enter the number of years you want the payouts to last. The tool will calculate your guaranteed monthly check.