Annuity Payout Calculator - Calculate Retirement Income
Free annuity payout calculator to determine how much regular income you can receive from your retirement savings and investment portfolio over time
Annuity Payout Calculator
Results
What is an Annuity Payout Calculator?
An annuity payout calculator is a free financial tool that helps you determine how much regular income you can safely withdraw from your retirement savings and investment portfolio over time.
This calculator helps with:
- Retirement planning - Calculate sustainable income from savings
- Withdrawal strategies - Determine safe withdrawal rates
- Portfolio longevity - See how long your money will last
- Income planning - Plan retirement budget and lifestyle
- Risk assessment - Evaluate different withdrawal scenarios
Payout Calculator Components
Your payout calculation includes these key components:
Portfolio Balance
Current value of retirement savings and investment accounts.
Withdrawal Rate
Percentage of portfolio withdrawn annually for income needs.
Expected Returns
Annual investment returns expected during retirement years.
Time Horizon
Expected length of retirement based on age and life expectancy.
Types of Retirement Withdrawals
Systematic Withdrawal
Regular withdrawals from investment portfolio. Maintains investment control but carries market risk.
Fixed Annuity
Guaranteed income payments from insurance company. Predictable but less flexible.
4% Rule
Withdraw 4% first year, adjust for inflation. Historically sustainable for 30+ years.
How to Use This Payout Calculator
Enter Portfolio Balance
Input total retirement savings amount (e.g., $500,000)
Set Expected Return
Input expected annual investment return (e.g., 6.0%)
Enter Current Age
Input your current age for retirement planning
Set Life Expectancy
Input expected lifespan for planning horizon
Choose Withdrawal Rate
Set annual withdrawal percentage (typically 3-5%)
View Income Results
See sustainable income and portfolio longevity
Benefits of Using This Calculator
- •Income Planning: Determine how much you can safely withdraw from retirement savings.
- •Longevity Analysis: See how long your portfolio will last with different withdrawal rates.
- •Risk Assessment: Understand the impact of different return rates on retirement income.
- •Strategy Comparison: Compare systematic withdrawals vs annuity income options.
- •Retirement Readiness: Assess whether your savings will support desired lifestyle.
Factors That Affect Your Payout Results
1. Portfolio Size
Larger portfolios generate more income. Each $100,000 generates about $4,000-$5,000 annual income at 4-5% withdrawal rates.
2. Withdrawal Rate
Higher withdrawal rates provide more income but may deplete savings faster. 4% is generally considered sustainable long-term.
3. Investment Returns
Higher returns help portfolio last longer. Even 1-2% difference significantly impacts portfolio longevity.
4. Retirement Length
Longer retirements require more conservative withdrawal rates. Plan for 30+ years to be safe.
Frequently Asked Questions
Common questions about retirement income and withdrawal strategies
What is an annuity payout?
An annuity payout is the regular income you receive from an annuity or retirement account. It can be structured as a fixed payment amount or over a specific time period, providing steady income during retirement.
What's the 4% rule for retirement withdrawals?
The 4% rule suggests withdrawing 4% of your portfolio in the first year of retirement, then adjusting for inflation annually. This approach historically has provided sustainable income for 30+ years.
How do I calculate sustainable withdrawal rate?
Sustainable withdrawal rates depend on portfolio size, expected returns, inflation, and desired retirement length. Most retirees use 3-5% annual withdrawal rates to preserve capital for 30+ years.
What payout frequency should I choose?
Monthly payouts match most retirees' regular expenses. Quarterly payouts may be suitable for larger portfolios, while annual payouts are less common but provide maximum compounding benefit.
Will my principal be depleted?
Depends on withdrawal rate and investment returns. Conservative 3-4% withdrawal rates with reasonable returns typically preserve principal. Higher withdrawal rates may deplete savings over time.
How does inflation affect payouts?
Inflation reduces purchasing power over time. Consider annual payout increases of 2-3% to maintain lifestyle. Fixed payouts lose about 26% of purchasing power over 10 years with 3% inflation.
Should I include Social Security in calculations?
Yes, factor in Social Security and other guaranteed income sources. This reduces the amount you need to withdraw from investments, making your portfolio last longer.
What's better: systematic withdrawal or annuity?
Systematic withdrawals maintain investment control and potential growth. Annuities provide guaranteed income but limit investment control. Consider your risk tolerance and income security needs.