Annuity Value & Payout Calculator

How to use this tool

1. Choose whether to value a payment stream, find a payment, or estimate how long withdrawals last.
2. Enter the payment or starting present value and the annual interest rate.
3. Choose a payment frequency and, when valuing a stream or finding a payment, enter the term in years.
4. Select ordinary end-of-period or annuity-due beginning-of-period timing.
5. Review the result cards and open the period schedule or yearly summary.

This is a fixed-period time-value model. It estimates level payments over a chosen number of periods and does not price a lifetime or joint-life guarantee, mortality pooling, insurer fees, tax treatment, or inflation riders. The schedule is calculated in your browser from the values you enter.

Types of annuities

• Fixed annuity: The insurance company guarantees a specific interest rate for a set period. Like a CD but issued by an insurer. Predictable income, no market risk.
• Variable annuity: Your premium is invested in sub-accounts (similar to mutual funds). Returns depend on market performance. Higher growth potential, but also risk of loss. Typically carries higher fees (1–3% annually).
• Fixed-indexed annuity: Returns are linked to a market index (e.g., S&P 500) with a floor of 0% (you can’t lose money) and a cap or participation rate limiting upside. A middle ground between fixed and variable.
• Immediate annuity (SPIA): You pay a lump sum and receive income payments starting within one month. Often used to convert a retirement nest egg into guaranteed lifetime income.
• Deferred annuity: Accumulation phase now, income payments later. Can be fixed, variable, or indexed.

Present value vs. future value

• Present value (PV): How much a series of future annuity payments is worth in today’s dollars. Used to determine a fair lump-sum buyout price or to compare an annuity offer against other investments.
• Future value (FV): How much a series of equal contributions will grow to by a future date, assuming a given rate of return. Used to project how a deferred annuity will accumulate before the payout phase begins.

Choose a payment frequency that matches the cash flow you are modeling: monthly means 12 periods per year, quarterly means 4, and biweekly uses 26. For a period-by-period schedule, the calculator treats the selected payments as deposits when valuing a stream, or as withdrawals when finding a payment or estimating how long a balance lasts. The yearly summary groups those same periods; it does not change the underlying rate or timing assumptions.

How the annuity calculations work

The annual rate is converted to a periodic rate, r = annual rate ÷ 100 ÷ payments per year. The term in years is multiplied by the selected frequency to get the number of payment periods. For ordinary payments made at each period end, the present and future values are:

PV = PMT × [1 − (1 + r)^−n] / r
FV = PMT × [(1 + r)^n − 1] / r

Here PMT is the level payment, r is the periodic rate, and n is the number of periods. For an annuity-due, multiply either value by (1 + r), because each payment happens one period earlier. At a zero rate, both values equal PMT × n. To find a level payment from a present value, the calculator rearranges the PV formula: PMT = PV × r ÷ ([1 − (1 + r)^−n] × timing factor).

Worked example: Receiving $1,000/month for 20 years at 5% annual rate:

• PMT = $1,000 | r = 0.05/12 ≈ 0.004167 | n = 240
• PV = $1,000 × [1 − (1.004167)^⁻²⁴⁰] / 0.004167 ≈ $151,525

Estimating how long withdrawals last

The duration mode solves the fixed-payment PV equation for n, the number of periods. At a positive periodic rate, it uses n = −ln(1 − PV × r ÷ (PMT × timing factor)) ÷ ln(1 + r). A finite duration exists only when the payment is large enough to reduce the balance; if it only covers the interest, the calculator explains that the modeled principal does not deplete. The final scheduled withdrawal is adjusted to bring the balance to zero, so it can be smaller than the regular payment. This estimate assumes a steady rate and level payments, with no fees, taxes, missed withdrawals, or changing market returns.

Annuity vs. lump sum: key questions

• How long do you expect to live? Annuities favor longevity; a lump sum is better if life expectancy is below average.
• Do you have other guaranteed income? Social Security + pension may make an annuity redundant.
• How sensitive are you to inflation? Fixed annuity payments lose purchasing power over time unless inflation-adjusted riders are included.
• What is your investment confidence? A lump sum requires disciplined self-management; an annuity removes that burden.

For neutral background on annuity types, fees, surrender periods, and questions to ask before buying, see the U.S. Securities and Exchange Commission’s Investor.gov annuity guide.