Annuity Payout Calculator
An annuity buys you certainty, and certainty has a price. This shows the price plainly: how many years before the payments hand back your own money, and what a fixed cheque is worth after decades of rising prices.
It would pay you, each year
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- Each month
- $0
- Years to get your own money back
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- What that cheque buys in 25 years
- $0
- Your spouse would keep
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- Keeping and drawing it yourself lasts
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Where the money goes
Each block is sized by its share, so you can see whether years to get your own money back or your spouse would keep is the bigger part without reading a single number.
Move it and watch
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at {v} for lump sum you would hand over
And what you can change
Why your own figure may differ
What a fixed cheque is worth as the years pass
The amount never changes. What it buys does, every single year.
| After | The cheque says | It buys what this buys today | Lost to prices |
|---|
Yearly income = lump sum x payout rate. Break-even = lump sum divided by yearly income - the years before the payments add up to what you handed over. Buying power = the income divided by price rises compounded over the years.
Annuity payouts: real examples
Three angles on the same offer. Click any card to load it.
- The break-even question
$500,000 at a 6% payout
A guaranteed income for life.
$30,000 a year - but it takes 16.7 years just to get your own money back. Beyond that, the insurer is genuinely paying.
Load this scenario in the calculator → - What inflation does
The same cheque against 5% inflation
A fixed income through a higher-inflation stretch.
The cheque still says $30,000. It buys what $8,859 buys today - 70% of its power gone. The number never changes and that is the problem.
Load this scenario in the calculator → - Leaving something behind
A 50% survivor option
Half the income continues to a spouse.
Your spouse keeps $15,000 a year. Taking the bigger cheque instead is a decision about their money, not just yours.
Load this scenario in the calculator →
Common questions about annuity payouts
What am I actually buying with an annuity?
Certainty. You hand over a lump sum and get an income that cannot run out, however long you live. That is genuinely valuable, and it is the one thing you cannot buy for yourself by investing. What it costs you is control of the money and any chance of leaving it to someone.
What does break-even mean here?
How long you have to live before the payments add up to the money you handed over. Until that point you are, in plain terms, being given your own money back. After it, the insurer is genuinely paying out. The tool shows your figure, and it is usually longer than people expect.
Is an annuity a good deal?
It depends entirely on what you are afraid of. If your fear is running out of money before you die, an annuity removes that fear completely and nothing else does. If your fear is dying early and handing a large sum to an insurer, it makes that worse. Both fears are reasonable.
What does inflation do to it?
This is the quiet risk. A fixed annuity pays the same cheque for life, so what it buys shrinks every year. The tool shows what your income would be worth in today's money at the end. Over 25 years the fall is often more than half, and the number on the cheque never changes.
What is a survivor option?
It keeps paying a share of the income to your spouse after you die, commonly half. It always lowers the income you get while alive, because the insurer expects to pay for longer. Skipping it to get a bigger cheque is a real decision about someone else's money, not just yours.
Should I put everything into one?
Very rarely. A common approach is to annuitise just enough to cover the bills that must be paid whatever happens, and keep the rest invested and reachable. That buys the floor without giving up all the flexibility.