Annuity Calculator
Calculate annuity payouts from a lump sum, or lump sum needed for desired income. Compare payout rates.
By Konstantin Iakovlev · Updated April 2026 · Source: IRS
Monthly Payout
$2,922.95
Annual Payout
$35,075.40
Total Payouts
$876,885.06
Annuity Summary
| Lump Sum | $500,000.00 |
| Monthly Payout | $2,922.95 |
| Payout Period | Age 65 to 90 |
| Total Payouts | $876,885.06 |
| Total Interest Earned | $376,885.06 |
Comparison at Different Rates
| At 3% growth | $2,371.06/mo |
| At 4% growth | $2,639.18/mo |
| At 5% growth | $2,922.95/mo |
| At 6% growth | $3,221.51/mo |
| At 7% growth | $3,533.90/mo |
Use the Annuity Calculator above to calculate your results. Enter your values and see instant results — all calculations run in your browser.
Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.
How It Works
An annuity converts a pile of savings into a stream of income, and the central question is usually one of two things: how much monthly income a given lump sum will buy, or how large a lump sum you need to fund the income you want. Because interest rates and the broader economic landscape keep shifting, the answers change from year to year, which makes it worth running the numbers fresh for 2026 before committing any retirement assets.
The projections here lean on actuarial principles, adjusting for current market conditions and the annuity type you choose, whether immediate, deferred, fixed, or variable. An immediate fixed annuity, for instance, weighs prevailing interest rates against your age and life expectancy to set a guaranteed payment. Ask instead for the lump sum behind a target income and the same machinery runs in reverse, solving for the principal those variables imply.
Two forces can quietly erode what you actually keep. Inflation chips away at the buying power of a fixed payment over time, and variable annuities expose your income to investment risk, so weigh your own tolerance honestly. Fees and surrender charges deserve the same scrutiny, since they cut into net income more than most people expect. Treat these figures as a starting point and confirm with a financial advisor that an annuity fits your wider goals and tax picture.
Example: Securing a $5,000 Monthly Income
- 1 Let's say Sarah, a 65-year-old, wants to receive a guaranteed $5,000 per month in 2026 from an immediate fixed annuity. She has a lump sum available and wants to know how much she needs to invest.
- 2 Inputting her age (65), desired monthly income ($5,000), and assuming an average payout rate for a fixed immediate annuity in 2026 (e.g., 6.5% annually for a single life, non-inflation-adjusted annuity), the calculator works backward. It determines the lump sum required to generate this income over her projected lifespan, considering current mortality tables and interest rate environments.
- 3 Based on these inputs, the calculator estimates Sarah would need a lump sum of approximately $923,077 to secure a $5,000 monthly income for life, starting in 2026. This value reflects the present value of all future payments, discounted by the annuity's effective interest rate.
- 4 This means Sarah would need to invest nearly $1 million to achieve her desired income target. This calculation provides a clear financial goal, allowing her to assess if her current savings are sufficient or if further adjustments to her retirement plan are necessary. It's important to note that actual rates can vary by provider and specific annuity features.
Source: IRS · Last updated: April 2026
Frequently Asked Questions
How much does a $100,000 annuity pay per month?
Are annuity payments taxable?
What is the difference between immediate and deferred annuities?
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