💸 Annuity Payout Calculator
This is the annuity question in reverse: instead of building a lump sum from payments, you start with the lump sum and ask what monthly income it can sustain. The calculator spreads the balance — plus the interest it keeps earning — evenly across every month of the payout period.
Retirees use this to translate a 401(k) or IRA balance into a monthly budget number. It assumes the payout rate stays constant for the whole period.
How to use this calculator
Enter the lump sum you have, the annual rate and the payout period to find the monthly income it can sustain.
- Enter the Lump sum available.
- Type the Annual interest rate as a percentage.
- Set the Payout period in years.
- Press Calculate to see the monthly payout and the total paid out.
Frequently asked questions
How is the monthly payout computed?
The lump sum is spread across every month of the payout period including the interest it keeps earning, using the standard amortization formula in reverse. $300,000 at 5% over 20 years sustains about $1,979.87 a month.
What is the total paid out?
The monthly payout times the number of months: about $475,168 in the example, which exceeds the original $300,000 because the balance earns interest while it pays out.
Who uses this calculation?
Retirees translating a 401(k) or IRA balance into a monthly budget, and anyone comparing lump-sum versus pension-style payout offers.
What happens if I pick a longer payout period?
The monthly amount falls, since the same lump sum must stretch across more months.