Annuity Payout Calculator
Determine how much you can withdraw periodically from a lump sum while accounting for investment returns and inflation.
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Find out how much you can withdraw from a lump sum on a regular schedule so it's fully depleted by the end of your chosen payout period, and see what those payments are really worth after inflation.
How Annuity Payout Calculator Works
The calculator solves the standard loan-payment formula in reverse to find your periodic withdrawal: PMT = PV × r ÷ [1 − (1 + r)⁻ⁿ], where PV is your lump sum, r is the annual return rate divided by payout frequency, and n is the total number of payouts (years × frequency). This is the same math a lender uses to compute a mortgage payment, applied here to spend down savings instead of repaying a loan — the balance is fully exhausted at the end of the term, assuming your money keeps earning the entered return rate throughout.
Total payout is simply the payment multiplied by the number of periods, expressed in nominal (future) dollars with no inflation adjustment.
The "real value" figure discounts every future payment back to today's purchasing power using your entered inflation rate, then sums them — this is always lower than the nominal total, and the gap between the two ("purchasing power loss") shows how much inflation is expected to erode your fixed payments over a long payout period.
See It In Action
Who Uses Annuity Payout Calculator and Why
- Finding the periodic withdrawal amount that fully depletes a lump sum by the end of a chosen payout period.
- Estimating what a fixed monthly annuity payout is really worth after accounting for expected inflation.
- Comparing monthly versus annual payout frequency on the same lump sum and return assumption.
- Seeing the gap between nominal total payout and its real, inflation-adjusted purchasing power over a long payout period.
Mistakes to Avoid
- Assuming the lump sum could run out early under this model — it can't in this calculation; the payment is deliberately solved so the balance reaches exactly zero at the end of the payout period, assuming the entered return rate holds every year, though real returns falling short would deplete it faster in practice.
- Treating the nominal total payout as what the money will actually be worth to spend — the "real value" figure, which discounts every future payment back to today's purchasing power, is the more meaningful number for planning against inflation.
- Using an overly optimistic return rate assumption — a higher assumed return raises the calculated monthly payment, but if actual returns underperform, the real-world balance would be exhausted sooner than the plan assumes.
Tips for Best Results
- Use a conservative, realistic long-term return assumption for how the lump sum will actually be invested, since the payment calculation depends entirely on that rate holding steady.
- Always check the real-value (inflation-adjusted) figure alongside the nominal total payout — the gap between them shows how much purchasing power erosion to expect over a long payout period.
Fixing Common Problems
The real value of my payout is noticeably lower than the nominal total. — This is expected for any payout stretched over many years — a fixed dollar payment buys less each year as prices rise, so the real-value figure (discounted to today's purchasing power) will always come in below the nominal total whenever inflation is above zero.
Terms Explained
Real value: The total payout restated in today's purchasing power by discounting each future payment using the entered inflation rate.
Purchasing power loss: The gap between the nominal total payout and its real value, representing how much inflation is expected to erode fixed payments over time.