Estimate your periodic income distributions from a lump-sum investment.
Monthly
Quarterly
Annually
Estimated Payout Details
Periodic Payout Amount:$0.00
Total Number of Payments:0
Total Amount Received:$0.00
Total Earnings (Growth):$0.00
Understanding How Annuity Payouts Work
An annuity is a financial product that provides a guaranteed stream of income, typically used for retirement planning. When you "annuitize" a lump sum, you are converting a single large payment into a series of smaller, regular payments over a specified duration or for the rest of your life.
Key Factors in the Calculation
Principal: This is the starting amount of money you are placing into the annuity.
Growth Rate: The annual percentage rate your principal is expected to earn while it is being paid out. In fixed annuities, this is guaranteed; in variable annuities, it fluctuates.
Withdrawal Period: The number of years you want the payments to last. A shorter period results in higher individual payments, while a longer period spreads the principal thinner.
Payout Frequency: How often you receive checks—monthly, quarterly, or annually.
Example Calculation
If you have a $200,000 principal with a 4% annual growth rate and you want to receive monthly payments for 15 years:
Monthly Payout: Approximately $1,479.38
Total Received: $266,288.40
Growth Earned: $66,288.40
Fixed-Period vs. Life Annuities
This calculator focuses on Fixed-Period Annuities (also known as Annuity Certain). Unlike life annuities, which stop when the holder passes away, a fixed-period annuity guarantees payments for the exact timeframe selected. If the owner passes away before the term ends, the remaining payments typically go to a designated beneficiary.
function calculateAnnuity() {
var principal = parseFloat(document.getElementById('annuity_principal').value);
var annualGrowth = parseFloat(document.getElementById('annuity_growth').value) / 100;
var years = parseFloat(document.getElementById('annuity_years').value);
var frequency = parseFloat(document.getElementById('annuity_frequency').value);
if (isNaN(principal) || isNaN(annualGrowth) || isNaN(years) || principal <= 0 || years <= 0) {
alert("Please enter valid positive numbers for principal, growth rate, and years.");
return;
}
var periodicRate = annualGrowth / frequency;
var totalPayments = years * frequency;
var payout;
if (periodicRate === 0) {
payout = principal / totalPayments;
} else {
// Annuity Payout Formula: PMT = PV * (r / (1 – (1 + r)^-n))
payout = principal * (periodicRate / (1 – Math.pow(1 + periodicRate, -totalPayments)));
}
var totalReceived = payout * totalPayments;
var totalEarnings = totalReceived – principal;
document.getElementById('periodic_payout').innerText = "$" + payout.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('total_payments').innerText = totalPayments.toLocaleString();
document.getElementById('total_received').innerText = "$" + totalReceived.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('total_earnings').innerText = "$" + totalEarnings.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('annuity_results').style.display = 'block';
}