How to estimate an annuity payout
Spread a balance across a fixed term.
1
Enter the balance
Use the amount available to fund the annuity.
2
Choose the term
A shorter payout period produces a larger payment.
3
Set the assumed rate
Use a conservative rate and compare with a quoted annuity illustration.
What does this tool do?
A fixed annuity spreads a balance across a chosen term and earns a return on the unpaid part. The payout rises with the rate and falls with a longer payout period.
The Formula
Payout = Balance × r ÷ [1 − (1 + r)^−n], where r is the periodic rate and n the number of paymentsFrequently Asked Questions
Is an annuity payout guaranteed?
Only as far as the issuer and any insurance guarantee. This model assumes a constant rate and no fees.
What happens after the payout period?
The balance is exhausted by design. A lifetime annuity uses mortality pooling, which is not modeled here.