Rex says
Money math without the spreadsheet headache. Plug in your numbers and I'll show you exactly where the dollars land.
Try a scenario
Click to load — tweak from there.Inputs
Result
Monthly income
$1,354
Annual income
$16,250
Years to recover the premium
15.4
years
Break-even age
80.4
years
Total received over 20 years
$325,000
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How to use this
- 1Enter premium (lump sum) ($).
- 2Enter quoted annual payout rate (%).
- 3Enter age at purchase (years).
- 4Enter payout structure.
- 5Enter inflation rider.
- 6Read your monthly income on the right — it updates as you type.
- 7Hit Share to keep the scenario or send it to someone.
About this calculator
A single premium immediate annuity converts a lump sum into guaranteed income for life or for a fixed period. The two questions that matter are how much monthly income the premium buys and how long you must live to get your money back. This calculator answers both: it derives income from the payout rate you enter, applies an optional joint-life reduction and an inflation rider haircut, and reports the break-even age where cumulative payments equal the premium. Payout rates rise sharply with age — a 65-year-old buying a life-only annuity in a normal rate environment might see roughly 6-7% while a 75-year-old sees 8-9% — because the insurer expects to pay for fewer years. Adding a cash-refund or period-certain feature protects heirs but lowers the rate by roughly half a point to a full point. Compare the result against a conservative withdrawal from the same lump sum before committing capital you cannot get back.
Worked example
Using the values the calculator loads with:
Inputs
- Premium (lump sum): 250000 $
- Quoted annual payout rate: 6.5 %
- Age at purchase: 65 years
- Payout structure: Single life — full rate
- Inflation rider: None — level payments
Results
- Monthly income: $1,354
- Annual income: $16,250
- Years to recover the premium: 15.4
- Break-even age: 80.4
- Total received over 20 years: $325,000
What each field means
Inputs
- Premium (lump sum) ($)
- The premium (lump sum) used in the calculation, measured in $. Starts at 250000 $ so you have a working example on load. Accepted range: 5000–5000000 $.
- Quoted annual payout rate (%)
- The quoted annual payout rate used in the calculation, measured in %. Starts at 6.5 % so you have a working example on load. Accepted range: 2–15 %.
- Age at purchase (years)
- The age at purchase used in the calculation, measured in years. Starts at 65 years so you have a working example on load. Accepted range: 45–90 years.
- Payout structure
- Pick the option that matches your situation — the maths changes per option. Choices: Single life — full rate, Joint & 100% survivor — about 15% lower, Life with 10-year certain — about 6% lower.
- Inflation rider
- Pick the option that matches your situation — the maths changes per option. Choices: None — level payments, 2-3% annual increase — about 25% lower start.
Results
- Monthly income
- Returned as a money amount in US dollars and shown as the headline result. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Annual income
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
- Years to recover the premium
- years
- Break-even age
- years
- Total received over 20 years
- Returned as a money amount in US dollars. It recalculates instantly whenever you change an input, so you can compare scenarios without reloading.
FAQ
Where do I get a payout rate?
Request quotes from at least three carriers or an annuity marketplace; rates differ by more than a full percentage point for the same premium and age, which compounds into six figures over a long retirement.
Is an annuity better than the 4% rule?
An annuity pays more per year than a 4% withdrawal because it returns principal and pools longevity risk, but it gives up liquidity and, without a refund feature, leaves nothing to heirs. Compare both against your actual need for flexibility.
What happens if the insurer fails?
State guaranty associations cover annuity benefits up to a limit, commonly $250,000 in present value. Splitting a large premium across carriers keeps you inside those limits.
Should I add the inflation rider?
It cuts your starting income by roughly a quarter but protects purchasing power over a 25-30 year retirement. Model both and compare the crossover year.
Accuracy and limitations
- Results are estimates before tax, fees, and inflation unless an input explicitly covers them.
- Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.
- This is educational maths, not financial advice. Check anything contractual with the lender or your accountant.
Related tools
Cite this calculator
Writing about this topic? Grab a citation — every link helps keep these tools free.
RevenueLab. (2026). Annuity Income Payout Calculator. Retrieved from https://www.revenuelab.fyi/toolbox/annuity-income-payout-calculator
<p>Source: <a href="https://www.revenuelab.fyi/toolbox/annuity-income-payout-calculator" target="_blank" rel="noopener">Annuity Income Payout Calculator — RevenueLab</a> (2026).</p>
Source: [Annuity Income Payout Calculator — RevenueLab](https://www.revenuelab.fyi/toolbox/annuity-income-payout-calculator) (2026).