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Retirement

Annuity Payout Calculator

Turn a lump sum into a monthly income stream and see the total payout.

Updated June 2026 · Editorial standards

Annuity details

$
%
Monthly payout
$2,923
Total payout
$876,900
Total interest earned
$376,900

A $500,000 annuity at 5% pays $2,923/month for 25 years.Over the full term you receive $876,900 — that's $376,900 of interest on top of your principal.

By the KalkWise Editorial Team Reviewed for accuracy Updated June 2026

What is the annuity payout calculator?

In short

An annuity payout calculator converts a lump sum into guaranteed monthly income. A $500,000 annuity earning 5% over a 25-year payout period pays about $2,923 per month — roughly $877,000 total, including $377,000 of interest.

Converts a lump sum into a fixed monthly income stream over a chosen payout period, showing the monthly payment, total payout, and interest earned.

How to use this calculator

  1. 1Enter the lump sum you'll convert into income.
  2. 2Set the annual interest rate the annuity earns.
  3. 3Choose the payout period in years — longer periods mean smaller payments.
  4. 4See your monthly payout and the total you'll receive.

The formula

payment=P×r1−(1+r)−n
payment = P × r / (1 − (1+r)^−n)
P
— Principal / lump sum
r
— Monthly rate = annual rate / 12
n
— Total months = years × 12
payment
— Monthly payout

Worked example

The scenario

$500,000 lump sum, 5% annual rate, 25-year payout.

gives

The result

Monthly payout: ~$2,923. Total payout: ~$877,000. Interest earned: ~$377,000.

Common use cases

  • Retirees converting a 401(k) or IRA into a steady income stream.
  • Comparing an annuity payout to the 4% withdrawal rule.
  • Pension recipients evaluating a lump-sum-to-annuity conversion.

Limitations & assumptions

  • Assumes a fixed interest rate — real annuities may have variable or indexed rates.
  • Does not include insurance company fees, riders, or surrender charges.
  • Does not account for inflation, which erodes fixed payments over time.

Frequently asked questions

It uses the present value of an annuity formula in reverse: payment = P × r / (1 − (1+r)^−n), where P is the principal, r is the monthly rate, and n is total months.

Disclaimer: KalkWise calculators are provided for general informational and educational purposes only and do not constitute financial, investment, tax, or legal advice. Results are estimates based on the figures you enter and the assumptions described above. Actual outcomes will vary. Consult a qualified professional before making financial decisions.