Annuity Calculator

An annuity calculator estimates the future value or present value of a series of equal, regularly spaced payments, and can also solve for the payment amount or the number of payments. This tool covers four jobs: growing savings with regular contributions (future value), valuing a payment stream today (present value), finding the payment needed to reach a target, and turning a lump sum into periodic payouts.

In an ordinary annuity, each payment is made at the END of the period (for example, a deposit on the last day of the month). In an annuity due, each payment is made at the BEGINNING of the period (for example, rent paid on the 1st). Because every payment in an annuity due starts earning interest one period earlier, its future value and present value are higher by exactly one period of interest: multiply the ordinary-annuity result by (1 + r), where r is the interest rate per period.

For an ordinary annuity: FV = PMT x ((1 + r)^n - 1) / r, where PMT is the payment per period, r is the interest rate per period, and n is the total number of payments. For an annuity due, multiply the result by (1 + r). Example: $500 per month at 7% annual (0.5833% per month) for 30 years (360 payments) grows to about $609,985.50 as an ordinary annuity.

For an ordinary annuity: PV = PMT x (1 - (1 + r)^-n) / r, where PMT is the payment per period, r is the discount rate per period, and n is the number of payments. For an annuity due, multiply by (1 + r). It answers questions like: how much money do I need today to fund $1,000 per month for 20 years at 6%? (About $139,580.77 as an ordinary annuity.)

Use the Payout mode of this calculator: enter the lump sum, the annual interest rate, the payout duration, and the payment frequency, and it computes the payment per period with PMT = PV x r / (1 - (1 + r)^-n). Example: a $500,000 lump sum at 5% annual paid monthly for 25 years supports about $2,922.95 per month as an ordinary annuity. The same mode can also answer 'how long will my money last' by solving for the number of payments instead.

Use the Payment Needed mode and enter your target as a future value. At 7% annual with monthly contributions for 30 years, you would need to save about $819.69 per month as an ordinary annuity. Raising the return assumption, starting earlier, or choosing annuity-due timing (payments at the start of each month) all lower the required payment.

This calculator treats the annual rate you enter as a nominal APR compounded at your chosen payment frequency: the rate per period is simply annual rate / payments per year (for example, 6% with monthly payments = 0.5% per month). This matches how most annuity calculators and loan schedules quote rates. It does not convert an effective annual rate into an equivalent periodic rate, so if your rate is quoted as an effective annual rate, convert it first: periodic rate = (1 + effective)^(1/frequency) - 1.

Enter your lump sum, monthly withdrawal, and expected return in the Payout mode and read the 'how long it lasts' result, which solves n = -ln(1 - PV x r / PMT) / ln(1 + r). If the monthly interest alone is greater than or equal to your withdrawal (PV x r >= PMT), the money never runs out mathematically, and the calculator will tell you the withdrawals are unsustainable instead of showing a date. Example: $300,000 at 5% with $2,000 monthly withdrawals lasts about 235.9 months (19.7 years).

A growing annuity is a payment stream where each payment increases by a fixed growth rate g each period (for example, contributions rising 3% per year with your salary). Its future value is FV = PMT x ((1 + r)^n - (1 + g)^n) / (r - g). This calculator models level (constant) payments only; if your payments grow each year, the level-payment result will understate the true future value, so treat it as a conservative baseline.

Tax treatment depends on the type of annuity and your country, and this calculator does not model taxes — all results are pre-tax estimates. In general, payments from a qualified retirement annuity may be taxed as ordinary income, while non-qualified annuities often tax only the earnings portion (an 'exclusion ratio' applies to the return of your original principal). Because rules vary widely, treat the numbers here as planning estimates and confirm tax details with a qualified professional.

An immediate annuity starts payouts very soon after a lump-sum purchase (typically within a year) — that is exactly what the Payout mode of this calculator models: lump sum in, periodic payments out. A deferred annuity has an accumulation phase first (your money grows for years) and payouts begin later; you can model that by running the Growth mode for the accumulation years, then feeding its future value into the Payout mode as the lump sum. For deferred fixed annuities with surrender charges and guaranteed rates, use our deferred fixed annuity calculator.

With annuity due, every payment is invested at the start of its period instead of the end, so each payment compounds for one extra period. The difference is exactly one period of interest on the ordinary-annuity result. For example, $500 per month at 7% for 30 years gives $609,985.50 as an ordinary annuity versus $613,543.75 as an annuity due — the ratio is exactly 1.005833 (one month of interest).

The math in this calculator assumes a fixed positive return, which is a simplification. Real fixed annuities can underperform inflation (losing purchasing power even when the nominal balance grows), and variable annuities tied to investments can lose nominal value and typically charge fees. The calculator's return field is an assumption you control — try a lower rate to see a conservative scenario. These are educational estimates, not financial advice.

No. This calculator produces mathematical estimates for education and planning only — not financial, tax, or legal advice. Annuity products involve fees, surrender charges, credit risk of the insurer, and tax rules that this tool does not model. For decisions involving real money, consult a licensed financial professional.