Annuity Calculator
Estimate your monthly income from a lump-sum annuity — or project the future value of a deferred annuity with regular contributions. Updated with 2026 annuity rates and payout formulas.
The amount you would hand over to the insurance company. Common amounts: $100K, $250K, $500K, $1M.
2026 SPIA rates: 5-7% for age 65.
Lifetime pays most; period-certain guarantees minimum.
💡 Rate adjustment: Lifetime payouts vary by age. Picker below adjusts your effective payout rate:
💰 Annuity Results
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Total Paid Out
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Total Interest
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Effective Payout Rate
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Payout Period
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📊 Annuity Breakdown
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💡 What this means
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📚 Annuity Resources
📚 See top-rated annuity guides on Amazon →📝 How to use this annuity calculator
- Pick a mode — choose Immediate Annuity for a lump sum you already have, or Deferred Annuity for a future value projection with regular contributions.
- Enter your numbers — principal and payout rate (immediate) or starting balance, monthly contribution, growth rate, and years to accumulate (deferred).
- Choose payout structure — lifetime pays the most per month but stops at death; period-certain guarantees a minimum number of payments (10, 15, or 20 years).
- Click Calculate — see your estimated monthly income, total payouts, total interest earned, and the effective rate of return on your capital.
- Compare scenarios — run the calculator with different rates and payout structures to see how your monthly income changes. The difference between a 5% and 6% payout rate over 20 years can be $50,000+ in lifetime income.
📌 5 tips before buying an annuity
- ✓ Shop at least 3-5 insurers. Annuity rates vary widely between carriers for the same product. Use a comparison service or independent broker — they get the same commission whether you buy from carrier A or B.
- ✓ Mind the surrender period. Most deferred annuities charge 7-10% surrender fees if you withdraw in years 1-5, tapering to 0 by year 7-10. Make sure you won't need the money before the surrender period ends.
- ✓ Check the insurer's credit rating. Annuities are only as safe as the company that issues them. Stick with carriers rated A or better by AM Best, Moody's, or S&P. State guaranty associations back a small amount (typically $250K-$500K) if the insurer fails.
- ✓ Understand the payout structure. A "lifetime" payout stops at death — if you die in year 2, you (or your heirs) get nothing back. A "period-certain" or "installment refund" guarantees a minimum number of payments. Lifetime + period-certain (e.g., "life with 10-year certain") costs slightly less than pure lifetime but protects heirs.
- ✓ Don't put everything in an annuity. Annuities are illiquid and have fees. Keep 1-3 years of expenses in cash, maintain a diversified investment portfolio, and consider an annuity only for the "longevity insurance" portion — the money you can't afford to outlive.
Disclaimer: This calculator provides annuity estimates for educational purposes only using 2026 average industry rates. Your actual annuity income will depend on the specific insurer, contract terms, age at purchase, payout structure, fees, and prevailing interest rates at the time of purchase. Annuities are insurance products backed by the issuing carrier's claims-paying ability — they are not FDIC-insured. Consult a licensed financial advisor or insurance professional before purchasing an annuity.
Related Tools
Annuities are one piece of a retirement income plan. These six calculators cover the rest — from RRSP/RRIF withdrawals to retirement savings projections, compound interest, and how much you need to retire.
- Retirement Savings Calculator — project how much you need to save and how long it will last in retirement.
- How Much to Retire Calculator — calculate the nest egg you need based on your desired retirement income.
- RRIF Calculator (Canada) — calculate your minimum annual withdrawal from a Canadian RRIF once you retire.
- Compound Interest Calculator — see how your savings grow over time with daily/monthly/annual compounding.
- Financial Freedom Calculator — calculate the exact portfolio size you need to live off investment income forever.
- 401(k) Employer Match Calculator — see how your employer match compounds into a major part of your retirement nest egg.