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Annuity Payout Calculator
Find the level monthly income a balance can pay over a set number of years while it keeps earning interest, and watch the balance run down. Enter your numbers and press Calculate.
Written by TopicDrill Editorial Team·Updated June 2026
Remaining balance over time
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How the annuity payout calculator works
In the payout phase, your balance does two things at once. It pays you a fixed amount each month, and whatever is left keeps earning interest. The calculator finds the exact monthly payment that spends the balance down to zero right at the end of your chosen period. Early on, interest covers a big share of each payment, which is why the balance chart falls slowly at first and faster toward the end.
This is the same present value of an annuity math that pension providers and retirement planners use. Because the unspent balance keeps working, the total you receive is larger than your starting balance, with the difference coming from interest.
A quick example
Start with $500,000 earning 4% a year and draw it down over 25 years. The level payment is about $2,640 a month, or roughly $31,600 a year. Across the full period you receive close to $790,000, well above the $500,000 you began with, thanks to interest on the balance you have not yet spent.
Things to keep in mind
The result assumes a steady rate and no fees, taxes or inflation, so your spending power will shrink over time even if the dollar payment stays flat. A higher rate or shorter period raises the monthly payout. To build the balance first, use our annuity calculator, or explore all of our free calculators.
Frequently asked questions
How is an annuity payout calculated?
The payout is the level payment that draws a balance to zero over the chosen period while the remaining balance keeps earning interest. It uses the present value of an annuity formula: PMT = P × i / (1 − (1 + i)^-n), where i is the rate per period and n is the number of payments.
Why does interest let me withdraw more than just the balance divided by years?
Because the money you have not yet withdrawn keeps earning interest. That ongoing growth funds part of each payment, so you can take out more in total than your starting balance, with the extra coming from the interest earned along the way.
What happens at the end of the payout period?
By design the balance reaches zero at the end of the period you choose. The calculator assumes you want to fully spend the balance over that time. If you want the money to last indefinitely, withdraw only the interest each year instead.
Is this the same as a real annuity contract?
Not exactly. A commercial annuity may guarantee income for life and includes fees and insurer assumptions. This calculator models a self funded payout from a balance at a fixed rate, which is useful for planning but not a quote.
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