Annuity Payout Calculator
Calculate your annuity payment schedule and total payout amounts.
How are annuity payouts calculated?
Annuity payouts are calculated based on principal amount, interest rate, payout period, and payment frequency using the annuity formula: Payment = P × r / [1 - (1+r)^(-n)], where P is principal, r is rate per period, and n is total periods. This ensures you receive equal payments that deplete the principal plus interest over time.
What payment frequencies are available?
Common frequencies include monthly (12x/year), quarterly (4x/year), and annual (1x/year). Monthly is most common for immediate annuities and provides more regular income, while annual payments may offer slightly higher returns due to less frequent compounding adjustments.
Are annuity payments taxable?
Part of each payment is return of principal (not taxed) and part is interest (taxed as ordinary income). For qualified annuities (IRA, 401k), the entire payment is taxable. For non-qualified annuities, use the exclusion ratio to determine the taxable portion. Consult a tax professional.
What's the difference between immediate and deferred annuities?
Immediate annuities start payments within a year of purchase, ideal for retirees needing income now. Deferred annuities accumulate value tax-deferred and begin payments later, typically used for retirement planning. This calculator works for immediate annuity payouts.