Annuity payout calculator
Income from a lump sum for a set period, or how long a lump sum lasts at a chosen income.
About the annuity payout calculator
Income from a lump sum for a set period, or how long a lump sum lasts at a chosen income.
Part of SmartCalcy’s retirement tools. It runs in your browser with no account, uses your own currency and units (change them at the top of the page), and gives estimates for information only, so check official guidance before you rely on a result.
How to use the annuity payout calculator
What it calculates and when to use it
Works out the income a lump sum can pay over a set number of years, or how long a lump sum lasts at a chosen withdrawal.
How to use it, step by step
- Choose income I can take, or how long it lasts.
- Enter the lump sum and the return.
- Enter the years of income, or the monthly withdrawal and any yearly rise.
What each input means
- Return – Yearly growth on the remaining pot.
- Yearly rise in withdrawals – Increases the withdrawal each year, for example with inflation.
How to read the results
- Monthly income – The level payment.
- Your money lasts – The months until the pot runs out.
The formula
Income = Lump × r ÷ (1 − (1 + r)^−m) for r = monthly return, m = months. The duration is found by stepping the balance forward month by month: balance × (1 + r) − withdrawal.
A worked example
A lump sum of 300,000 at 4% paid out over 25 years gives 1,571.69 a month, or 18,860 a year. The first-year withdrawal is 6.29% of the pot.
Assumptions and limits
- Constant returns.
- Withdrawals are at the end of each month.
Common mistakes
- Choosing a withdrawal rate that is too high for a long retirement.
Frequently asked questions
What if the return covers the withdrawal?
The pot never runs out in this model and the tool says so.
Related tools
Details
- Total paid out
- £471,507
- Interest earned along the way
- £171,507
- Share of the pot taken each year, first year
- 6.29%