In this context, an annuity is a stream of equal periodic payments — this calculator models converting a lump sum into that payment stream, or the reverse.

Does this account for taxes or fees?

No — actual annuity products often include fees, and payouts may be taxable depending on the account type. This calculates the underlying math only.

Annuity Calculator

Calculate the periodic payout a lump sum can fund, or the lump sum needed today to fund a target periodic payout.

Mode

Lump sum

Rate per period

Number of periods

Payout Per Period

$659.98

How It Works

Payout from a lump sum

Given a starting lump sum, a rate of return, and a number of periods, this solves for the constant payout amount that fully depletes the lump sum (including growth) by the end of the period.

Lump sum needed for a target payout

This works in reverse — given a desired payout per period, it solves for how large a lump sum you'd need today to fund exactly that payout for the specified number of periods.

Example Calculation

A $100,000 lump sum earning 5% annually can fund a payout of roughly $660/month for 20 years before being fully depleted.

Common Mistakes

Assuming the payout lasts forever — this calculator assumes the lump sum is fully depleted by the end of the specified period, not a perpetual payout.
Using an overly optimistic rate of return, which overstates how much payout the lump sum can actually sustain.

Frequently Asked Questions

What is an annuity?: In this context, an annuity is a stream of equal periodic payments — this calculator models converting a lump sum into that payment stream, or the reverse.
Does this account for taxes or fees?: No — actual annuity products often include fees, and payouts may be taxable depending on the account type. This calculates the underlying math only.