What is the tradeoff between life-only and period-certain payouts?

Life-only typically pays more each month but stops at death (no guarantee for heirs). Life with period certain pays slightly less but guarantees payments for a minimum period even if you pass away earlier. Choose based on longevity risk tolerance and beneficiary needs.

Should payments be monthly, quarterly, or annual?

Monthly payments improve budgeting and slightly increase effective compounding advantage for remaining balance. Annual payments are simpler administratively but less granular. Most retirees prefer monthly to match expenses.

How does inflation adjustment impact payments?

Choosing a fixed annual increase (e.g., 2%) or CPI linkage lowers initial payments but helps preserve purchasing power over time. If you expect 2–3% inflation, consider an adjustment so real income doesn’t erode across a long retirement.

Annuity Payment Calculator

Estimate periodic income from an annuity during payout phase based on principal amount and payout terms

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Estimated Annuity Income

$3,030

per month

Annual Income

$36,359

Total Over Period

$727,176

Total Return

$227,176 (45.4%)

Annuity Details

Principal Amount ($)

Lump sum invested in annuity

Payout Period

Payout Years

Payment Frequency

Expected Return During Payout (%)Interest rate during payout phase

010

Personal Information

Current Age

Life Expectancy

Inflation Adjustment

Payout Options Comparison

Fixed 20 years

$3,030/mo

Guaranteed payments for 20 years

Life only (age 85)

$3,030/mo

Payments until death, nothing to heirs

Life + 20yr certain

$3,030/mo

Life or 20 years minimum

Joint life (2 lives)

$2,851/mo

Payments until both pass away

About Annuity Payments

An annuity payment calculator helps you estimate the income you'll receive when you convert your annuity principal into regular payments. Different payout options offer different levels of security and payment amounts.

Fixed Period: Guaranteed payments for a set number of years, regardless of how long you live.

Life Only: Highest payment amount, but payments stop when you pass away (nothing for heirs).

Life with Period Certain: Payments for life OR a minimum guaranteed period, whichever is longer.

Joint Life: Payments continue until both you and your spouse pass away.

Key Financial Terms

Understand the essential concepts behind this calculator

Annuity Payment

Regular periodic payment from an annuity contract

Learn more →

View all financial terms in our glossary →

Frequently Asked Questions

Common questions about the Annuity Payment Calculator

At a 4% expected return during payout with a 20-year fixed period, a $500,000 annuity might generate roughly $3,000–$3,600 per month depending on frequency and exact assumptions. The calculator computes your exact periodic and annual income.

📊 Historical Market Data Sources

S&P 500 Historical Returns:

• Average annual return (1926-2024): ~10% nominal, ~7% inflation-adjusted
• Standard deviation: ~20% (indicating significant year-to-year volatility)
→ Source: NYU Stern - Historical Returns on Stocks, Bonds and Bills

Dividend Yields:

• S&P 500 average dividend yield: 1.5-2.0% (as of 2024-2025)
• Historical dividend growth rate: ~5.9% annually (1960-2024)
→ Source: S&P Dow Jones Indices

Bond Returns:

• 10-Year Treasury bonds: ~5% average annual return (1926-2024)
• Corporate bonds (investment grade): ~6% average annual return
→ Source: NYU Stern - Corporate Finance Data

Inflation Rate:

• Long-term average: ~3% annually (1926-2024)
• Recent (2020-2024): 2-8% range with 2022 peak at 8%
→ Source: Bureau of Labor Statistics - Consumer Price Index

Important: Past performance does not guarantee future results. Market returns vary significantly year-to-year. These are long-term historical averages.

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⚠️ Important Disclaimer

This Annuity Payment Calculator provides estimates for educational and informational purposes only. Actual results may vary significantly based on individual circumstances, market conditions, regulatory changes, and other factors beyond the scope of this calculator.

The calculations and projections provided are based on assumptions and historical data that may not reflect future performance.Past performance does not guarantee future results.

This tool is not financial advice, tax advice, legal advice, or investment advice. For personalized guidance tailored to your specific situation, please consult with qualified professionals including:

Certified Financial Planner (CFP)
Certified Public Accountant (CPA) for tax matters
Licensed attorney for legal matters
Registered Investment Advisor (RIA) for investment decisions

Data Accuracy: All data sources, statistics, and rates were verified as accurate as of October 2025. Tax rates, market conditions, and other financial data change over time. Always verify current rates and consult official sources.

No Warranties: While we strive for accuracy, we make no warranties or guarantees regarding the accuracy, completeness, or reliability of any information provided. Use this tool at your own risk.