Retirement
Annuity Payout Calculator
Turning savings into income is the hardest arithmetic in retirement. This answers the simplest version: if a balance has to last exactly this many years and earns a steady return while it drains, what can it pay each month?
Conservative — this money is being spent, so it is usually invested cautiously.
Monthly payout
$3,030
Until the balance reaches zero after 20 years.
- Annual income
- $36,359
- Total paid out
- $727,176
- Of which interest
- $227,176
Earned by the balance while it drains.
How this calculator works
The monthly payout is the level payment that fully amortises the lump sum over the period at the given return — the same formula as a loan payment, with you as the lender. Interest earned is total payments minus the original principal.
Assumes a constant return, level payments, and no inflation adjustment, so later payments buy less than early ones. It also ignores taxes, which depend heavily on whether the money sits in a taxable, traditional, or Roth account.
Try an example
Frequently asked questions
Is this the same as buying an annuity?
No — it is the self-managed version. A commercial annuity transfers longevity risk to an insurer, which pays for life however long that is, in exchange for fees and giving up access to the principal. This shows what the same lump sum yields if you draw it down yourself over a fixed period.
What happens if I live longer than the period?
The money is gone. That is the central risk of a fixed-period drawdown and the reason lifetime annuities exist. Many people cover essential spending with guaranteed income — Social Security, a pension, or a small annuity — and use a drawdown like this for the discretionary part.
How does this compare to the 4% rule?
The 4% rule aims to preserve the balance indefinitely, so it withdraws less. This deliberately spends the balance to zero over a set period, which produces a larger payment. On $500,000 over 20 years the difference is substantial — see our FIRE and savings drawdown calculators for the preservation approach.
What return should I assume?
Lower than during accumulation. Money being spent cannot ride out a downturn, so drawdown portfolios usually hold more bonds and cash. Something in the 3–5% range is a common planning figure, and testing a percentage point lower shows how sensitive the payout is.
Related calculators
How Long Will My Savings Last?
See how long your savings last when you withdraw a fixed amount each month while the balance keeps earning a return — and whether it ever runs out.
Retirement Calculator
Project your retirement savings: what your balance could reach by retirement age and the monthly income it could sustainably provide.
FIRE Calculator
Find your FIRE number — the nest egg for financial independence — using the 4% rule, and see how many years of saving stand between you and early retirement.
Present Value Calculator
What is a future sum of money worth today? Discount a future amount back to its present value at a given rate — the core of every finance decision.
Disclaimer: DayCents provides this calculator for educational purposes only. Results are estimates based on your inputs and the stated assumptions — they are not financial advice, a quote, or an offer of credit. Consult a qualified financial professional before making major money decisions.