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A fixed-period annuity pays out a set amount each month until the principal (plus interest) is fully depleted at the end of the term.
This calculator finds that fixed monthly payout from your principal, interest rate, and payout period.
How it works
Enter the principal amount, annual interest rate, and payout period in years. The calculator applies the standard annuity payout formula — the same amortization math used for loan payments, but framed as withdrawals from a lump sum instead of repayments of a loan.
- Enter principal ($).
- Enter annual interest rate (%).
- Enter payout period (years).
- Click Calculate to see your results.
Examples
$250,000 principal, 5%, 20-year payout
A $250,000 lump sum earning 5% annually, paid out over 20 years, produces a fixed monthly payout of about $1,649.89.
Who should use it
- Estimating retirement income from a lump-sum annuity purchase.
- Comparing payout amounts across different annuity terms and interest rates.
Industry applications
- Retirement and annuity planning
- Insurance and financial advising
Advantages
- Uses the same reliable, standard amortization formula used throughout the site's loan calculators.
- Shows total interest earned alongside the monthly payout.
Limitations
- Models a simple fixed-period, fixed-rate payout — not lifetime annuities, inflation adjustments, or variable rates.
Common mistakes to avoid
- Confusing this fixed-period, fully-depleting annuity with a lifetime annuity or one that leaves the principal untouched.
- Using an unrealistic interest rate assumption that doesn't reflect the actual annuity contract's guaranteed rate.
Best practices
- Compare the calculated payout against your actual income needs before committing to an annuity contract with a specific payout term.
Tips
- A shorter payout period produces a larger monthly payment but exhausts the principal sooner — balance your expected lifespan and income needs when choosing a term.