Annuity Payout Calculator
This advanced annuity payout calculator helps you compare typical payout structures: immediate fixed-period, deferred fixed, life-estimate (using a user-specified life expectancy), joint-life estimate and a simple variable-annuity income estimate. It is designed for quick estimates and educational comparisons, not for issuing guarantees or replacing insurer pricing.
Inputs include purchase amount, assumed interest or expected return, payout frequency, term/deferral, joint-survivor adjustment, fees and an inflation rate for a first-order real-payment estimate. Results are shown as payment per period and annualized amounts where applicable.
Single premium paid now in exchange for a fixed periodic payment starting immediately and continuing for a specified number of years.
Inputs
Results
Payment per period
-$300.00
Annual payment (nominal)
-$300.00
Annual payment (inflation-adjusted)
-$294.12
| Output | Value | Unit |
|---|---|---|
| Payment per period | -$300.00 | currency |
| Annual payment (nominal) | -$300.00 | currency |
| Annual payment (inflation-adjusted) | -$294.12 | currency |
Visualization
Methodology
Fixed-period and deferred calculations use standard time-value-of-money annuity algebra: solving the standard present-value annuity formula for the periodic payment. For periodic rate r and total periods n, the annuity factor is (1 - (1+r)^-n)/r; payment = PV / annuity_factor, with an extra discount for deferred starts.
Life-estimate and joint-life results are approximations. Life-estimate uses a user-supplied life expectancy (years) to set the number of periods; it does not use mortality tables or insurer-blended survival probabilities. Joint-life uses a user-entered survivor multiplier to crudely reflect reduced payments for survivor benefits.
Variable-annuity estimates are heuristic: they multiply purchase amount by net expected return (expected return less fees) to provide a first-year income projection. This is not a guarantee and ignores sequence-of-returns risk and volatility.
Worked examples
Example 1: $100,000 purchase, 3% assumed interest, monthly payouts for 10 years. The tool computes periodic payments using the monthly periodic rate (3%/12) and n = 120 payments.
Example 2: Deferred annuity with 5-year deferral and 20-year payout: payments are larger than a straight 20-year immediate annuity because the payment stream is discounted back through the deferral period.
Example 3: Variable-annuity estimate with 5% expected return and 1% fees gives a net expected return of 4%; first-year income estimate = 4% × purchase amount.
Key takeaways
Use fixed-period methods to model a guaranteed-term payout. Use deferred for payments that begin later. Use life-estimate only if you supply a credible life expectancy or if you want a rough rule-of-thumb. For joint-life and variable annuity scenarios, seek formal insurer quotes for contractual guarantees.
This calculator provides estimates only. Real insurer quotes incorporate mortality tables, underwriting, crediting rates, fees, profit margins and regulatory constraints that are not modeled here.
Further resources
Expert Q&A
Is this calculator a quote for an annuity contract?
No. Outputs are estimates for planning and comparison only. Only an insurer can provide a binding annuity quote that reflects underwriting, product-specific guarantee rates, fees and any riders.
How should I choose the interest or return rate?
Choose an interest or return rate that reflects either the current guaranteed crediting rates available in the market or your expected long-term return after fees. Compare multiple scenarios to see sensitivity. For life-contingent products, insurers typically use their own internal assumptions and mortality tables.
Does the tool use actuarial mortality tables?
No. For life-contingent or joint-life pricing, use a licensed actuary or insurer quote. This tool accepts a user-specified life expectancy for illustrative calculations but does not implement professional mortality tables.
Why do variable-annuity estimates differ from fixed annuities?
Variable-annuity estimates are driven by market return assumptions and fees and are therefore not guaranteed. Fixed annuities provide contractual guarantees from the insurer; variable strategies do not.
What are the main limitations of these estimates?
Simplifications include: no underwriting adjustments, no insurer credit considerations, no mortality table modeling, simplified treatment of deferral discounts, and single-rate assumptions. These can materially change quoted payouts from insurers.
How accurate are the inflation-adjusted results?
Inflation adjustment here is a simple first-year real estimate dividing nominal first-year payment by (1 + inflation_rate). It does not model subsequent CPI changes, cost-of-living riders, or compounding effects over multiple years.
Sources & citations
- NIST - National Institute of Standards and Technology — https://www.nist.gov/
- ISO - International Organization for Standardization — https://www.iso.org/
- IEEE - Institute of Electrical and Electronics Engineers — https://www.ieee.org/
- OSHA - Occupational Safety and Health Administration — https://www.osha.gov/