See the level income a lump sum can pay out over a fixed period, and how that differs from a real insurance-company quote.
A math model, not an insurance quote.
Given a starting balance, a growth rate, and a payout period, this calculator computes the level payment that draws the balance to exactly zero by the end of the period, the same time-value-of-money formula behind a mortgage or a loan amortization schedule, just running in the opposite direction. It is the math underneath an annuity, not a substitute for a real quote.
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Figures above are computed directly from the same payment formula used in the calculator, not pulled from a third-party rate table. For how real insurers price payouts, state regulators overseen by the National Association of Insurance Commissioners publish licensing and complaint information on annuity sellers.
This tool models an immediate annuity: payouts start right away and the remaining balance keeps earning interest between payments until it reaches zero. A deferred annuity instead lets the lump sum grow, untouched, for a period before payouts begin, often to take advantage of tax-deferred growth first. If you are modeling a deferral period, add the growth years to your period field and treat the resulting larger balance as your new starting principal for the payout phase.
Comparing this against systematic withdrawals from your own portfolio instead of an insurance product? The savings withdrawal calculator runs that version, adjusting for inflation along the way.
No. This tool runs the plain time-value-of-money formula for a level payout that exhausts a balance over a fixed period. A real annuity quote from an insurer bundles in mortality pooling, fees, surrender charges, and often a guarantee against outliving your money, so an actual quote will differ from this math, sometimes by a lot.
An immediate annuity starts paying out right after you hand over the lump sum. A deferred annuity lets the balance grow for a period first, then starts payouts later, often to lock in tax-deferred growth before income begins. This calculator models the immediate, already-growing-while-paying-out style shown in the payout table below.
More frequent payments mean less time for the remaining balance to earn interest between payouts, which very slightly lowers the total interest earned over the full period and slightly raises how much of each payment comes from principal. The effect is small compared to the interest rate and payout period themselves.
Compare the guaranteed payout rate, not just the headline interest rate, along with surrender charge periods, rider fees, and the insurer's financial strength rating. State insurance regulators, reachable through the National Association of Insurance Commissioners, publish complaint records and licensing status for annuity sellers.
Not automatically. A higher stated rate paired with a long surrender period and high fees can pay out less in practice than a lower stated rate with more flexibility. Read the full illustration, not just the headline percentage, before comparing two offers.