Annuity calculator
Grow a pot with regular deposits, then work out the income it can pay for a chosen number of years.
About the annuity calculator
Grow a pot with regular deposits, then work out the income it can pay for a chosen number of years.
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 calculator
What it calculates and when to use it
Builds a pot with regular deposits, then converts it into a level monthly income for a number of years.
How to use it, step by step
- Enter the starting balance, monthly deposit and years of saving.
- Enter the return while saving.
- Enter the years you want income and the return during payout.
What each input means
- Years of saving – The accumulation phase.
- Years of income – The payout phase.
How to read the results
- Monthly income – The level payment that uses the pot up at the end.
- Pot when income starts – The balance at the end of saving.
The formula
Pot = PV × (1 + g)^n + PMT × ((1 + g)^n − 1) ÷ g. Income = Pot × r ÷ (1 − (1 + r)^−m), where g and r are monthly returns and m the number of payout months.
A worked example
20,000 plus 400 a month for 20 years at 6% builds a pot of 245,518. Paid out over 25 years at 4%, that gives 1,286.26 a month.
Assumptions and limits
- Constant returns.
- A real annuity from an insurer depends on current rates, your age and health.
Common mistakes
- Assuming insurer annuities are priced like a simple drawdown.
Frequently asked questions
Is this a real annuity quote?
No. It models a self-funded drawdown to zero. For a guaranteed lifetime income, get quotes from insurers.
Related tools
Details
- Pot when income starts
- £245,518
- Total deposits
- £116,000
- Total income paid
- £385,878
- Growth during payout
- £140,360