How to Use the Immediate Annuity Payout Calculator
An immediate annuity converts a lump sum into a stream of regular payments that start right away, typically within a month of purchase. Retirees often use them to turn savings or a rollover balance into predictable monthly income, choosing between a period-certain annuity that pays for a set number of years or a life annuity that pays for as long as they live.
This calculator takes your lump-sum premium, expected annual rate, and payout period, then applies the standard present-value-of-annuity formula to estimate your monthly payment and the total amount you'd receive over the period. For a period-certain annuity, use the contract term; for a life annuity, use your expected remaining life expectancy as a stand-in for the payout period.
Real insurance products include fees, minimum guaranteed rates, and mortality-based pricing for life annuities that this simplified calculator doesn't capture, so actual payouts will differ. Always compare official illustrations from multiple insurers and review the contract's guarantee terms before purchasing an annuity with a large lump sum.
Frequently Asked Questions
A period-certain annuity pays out only for a fixed number of years (e.g. 10 or 20) and then stops. A life annuity pays for as long as you live but has a lower monthly payment. To estimate a life annuity here, enter your expected remaining life expectancy as the payout period.
Use the rate quoted in your specific annuity contract, since insurers vary. For a conservative estimate, try a rate slightly below the quoted one to see your minimum expected payout before fees.