Annuity Payout Calculator — Depletion Chart & 4% Rule Withdrawal
Calculate your monthly payout from a lump sum or how long your savings will last. Features inflation-adjusted projections, a depletion chart, and a year-by-year balance table.
Annuity Payout Calculator
Results update instantly as you type
Enter Values
Embed Code
Copy and paste this HTML snippet into any web page to embed this calculator directly.
<iframe src="http://127.0.0.1:54963/embed/finance/annuity-payout-calculator?ref=embed" title="Annuity Payout Calculator — Depletion Chart & 4% Rule Withdrawal" width="100%" style="max-width:600px; border:none; height:500px;" loading="lazy"></iframe>
Direct Link
Share this link to let others open the calculator in their browser.
The Formula
The first formula calculates the fixed periodic payment that will deplete a starting principal to exactly zero over n periods. The second formula isolates n — solving for how many periods a given fixed payment amount will last before the principal is exhausted.
Variable Definitions
Periodic Payment
The fixed withdrawal amount each period (monthly or annually). The annuity payout formula is designed so that the balance reaches exactly zero at the end of the specified term, assuming a constant rate of return.
Period Rate
The annual rate of return divided by the number of periods per year (divided by 12 for monthly payouts, or 1 for annual payouts).
Safe Withdrawal Rate Benchmark
A widely cited guideline from the Trinity Study: withdrawing 4% of your portfolio in year one, then adjusting for inflation, has historically provided a 95%+ success rate over 30-year retirements. On $500,000, that is $20,000/year or approximately $1,667/month.
How to Use This Calculator
- 1
Select "Monthly Payout" or "How Long" mode depending on what you want to calculate.
- 2
Enter your starting principal, expected annual rate of return, and payout frequency.
- 3
Review the depletion chart to compare how long your money lasts with and without investment returns.
Common Applications
- Determine how much income you can safely withdraw from a lump-sum retirement account without outliving your savings.
- Compare different payout frequencies and investment return assumptions to find the right annuity strategy for your retirement.
- Plan the transition from accumulation to decumulation by modeling how long your nest egg will last under various scenarios.
Earning returns on your remaining balance while withdrawing stretches how long your savings last
Understanding the Concept
An annuity payout calculator answers one of the most anxiety-inducing questions in retirement planning: "Will I outlive my money?" The key insight is that your remaining balance continues to earn investment returns even as you make regular withdrawals. A $500,000 portfolio earning 5% annually can generate $2,688/month for 25 years before reaching zero — significantly more than the simple division of $500,000 divided by 300 months which only gives $1,667/month with no investment return. The difference between a 0% return and a 5% return on the same starting principal is enormous: it can add 10 or more years of payout duration. This calculator also accounts for the self-sustaining threshold — if your withdrawal rate is low enough that it does not exceed the interest earned, your principal can last indefinitely.
Frequently Asked Questions
Sources & References
Related Calculators
Reviews
No reviews yet. Be the first to share your experience with Annuity Payout Calculator — Depletion Chart & 4% Rule Withdrawal.
Write a Review