What is an annuity payout?

An annuity payout converts a lump sum into a stream of regular payments for a chosen period, using an interest rate so part of every payment is the return on the remaining balance.

How is the monthly payout calculated?

Using the annuity factor: payout = lump sum x monthly rate / (1 - (1 + monthly rate)^-total months). It is the same formula used for loan EMIs, applied in reverse.

Annuity Payout Calculator

Convert a lump sum into fixed monthly income for a chosen period.

Payout Details

Lump Sum Amount

Annual Return

Payout Period (years)

yrs

Monthly Payout

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Total Payouts

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Interest Earned

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Payout Years

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How the payout works

A lump sum of 5,000,000 at 6% over 20 years pays about 35,700 monthly — roughly 8,500,000 in total. The extra 3,500,000 is the interest earned by the money still invested, which is exactly what makes the income last the full period.

Annuity Payout FAQ

What happens if I outlive the payout period?▶

With a fixed-period annuity the payments stop when the period ends. A lifetime annuity pays until death but typically pays less per month — a classic trade-off between certainty and income.

Should I buy an annuity or manage the money myself?▶

Annuities remove market risk and the risk of outliving savings, but they lock your money and often carry fees. Compare the payout here with what you could safely withdraw yourself.