This calculator can estimate the annuity payout amount for a fixed payout length or estimate the length that an annuity can last if supplied a fixed payout amount. Please use our Annuity Calculator to estimate the end balance of an annuity for the accumulation phase.
• Fixed Length Mode: Calculates the periodic income payment amount you can withdraw from a fixed duration.
• Fixed Payment Mode: Solves how many years and months your principal balance will last for a desired recurring withdrawal.
Enter your starting principal, expected return rate, and desired duration.
Year-by-year beginning balances, compound interest earned, annual withdrawals, and ending principal balances.
| Year | Beginning Balance | Interest / Return | Payouts | Ending Balance |
|---|---|---|---|---|
| Year 1 | $500,000.00 | +$28,976.19 | -$66,612.36 | $462,363.83 |
| Year 2 | $462,363.83 | +$26,654.87 | -$66,612.36 | $422,406.34 |
| Year 3 | $422,406.34 | +$24,190.38 | -$66,612.36 | $379,984.36 |
| Year 4 | $379,984.36 | +$21,573.89 | -$66,612.36 | $334,945.89 |
| Year 5 | $334,945.89 | +$18,796.01 | -$66,612.36 | $287,129.54 |
| Year 6 | $287,129.54 | +$15,846.81 | -$66,612.36 | $236,363.99 |
| Year 7 | $236,363.99 | +$12,715.70 | -$66,612.36 | $182,467.33 |
| Year 8 | $182,467.33 | +$9,391.47 | -$66,612.36 | $125,246.43 |
| Year 9 | $125,246.43 | +$5,862.21 | -$66,612.36 | $64,496.28 |
| Year 10 | $64,496.28 | +$2,115.27 | -$66,611.56 | $0.00 |
When entering the payout phase, understanding whether your annuity is qualified (funded with pre-tax dollars) or non-qualified (funded with after-tax dollars) is essential for calculating net spendable retirement cash flow.
Funded with pre-tax dollars (such as an IRA or 401k rollover). The entire periodic payout (both principal and interest) is taxable as ordinary income and is subject to Required Minimum Distribution (RMD) rules starting at age 73/75.
For non-qualified annuities funded with after-tax money, the IRS Exclusion Ratio treats a portion of each monthly payment as a tax-free return of principal, while only the earnings portion is subject to ordinary income tax.
Distributions taken before age 59½ may trigger an IRS 10% early withdrawal penalty on the taxable earnings portion, in addition to standard income taxes, unless an exception (such as substantially equal periodic payments under Rule 72t) applies.
Model initial principal deposits, monthly additions, and compound growth before payout begins.
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