Annuity Payout Calculator

Choose a mode: get the monthly payment a principal supports over a set period, find how long your money lasts at a payment you pick, or break down a lottery jackpot into its 30 graduated annual annuity payments.

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How annuity payouts work

An annuity turns a pile of money into a stream of payments. The insurer (or your own account) keeps earning interest on the balance that hasn't been paid out yet, which is why a $100,000 annuity pays out more than $100,000 over its life. This calculator handles three questions: what a principal pays per month over a fixed period, how long a principal survives a payment you choose, and how a lottery's 30-year graduated annuity actually pays out.

The formula

M = P × r / (1 − (1 + r)−n)

M is the monthly payment, P the principal, r the monthly rate (annual rate ÷ 12), and n the number of monthly payments. It's the same amortization math as a mortgage, run in your favor. For the lottery mode, the first payment is jackpot × 0.05 / (1.0530 − 1), and each of the 30 annual payments is 5% larger than the last — chosen so they sum to exactly the advertised jackpot.

Worked example

$100,000 earning 5%, paid out over 10 years:

Monthly payment: $1,060.66 for 120 payments — $127,278.62 in total, of which $27,278.62 is interest earned along the way. Prefer to name the payment instead? Withdrawing $1,000/month from the same $100,000 at 5% lasts about 10 years, 10 months (130 payments). And if your payment is no more than the monthly interest — $500/month on $100,000 at 6% — the principal never shrinks and it pays forever.

Annuity types in plain English

An immediate annuity starts paying right away; a deferred one grows first and pays later. A fixed annuity pays a guaranteed rate (what this calculator models); a variable one moves with markets. A period-certain annuity pays for a set number of years, while a life annuity pays until you die — the insurer prices in life expectancy, which is why quotes differ from the pure math here. Real products also carry fees and surrender charges that this clean arithmetic doesn't include.

Lottery annuity vs. the lump sum

The advertised jackpot is the sum of 30 annuity payments, not cash in a vault. The cash option is typically only about 45–52% of the headline number — it's the amount that, invested by the lottery at bond yields, would fund those 30 payments. Take the annuity if you value a guaranteed, rising income and protection from your own spending; take the lump sum if you can invest at a better after-tax return than the implied bond rate, want flexibility, or worry about tax rates rising on future payments. Either way taxes take a large slice, and most winners' real risk isn't math — it's spending velocity.

Frequently asked questions

How much does a $100,000 annuity pay per month?

At 5% over a 10-year payout period, $100,000 pays $1,060.66 a month — $127,278.62 in total. Stretch it to 20 years and the payment drops but total interest rises, because the balance earns interest longer. Real insurer quotes will differ slightly since they include fees and, for life annuities, life expectancy.

How long will $100,000 last at $1,000 a month?

Earning 5% a year, about 10 years and 10 months — 130 payments, with the interest earned along the way funding roughly $29,600 beyond your original principal. At 0% it would last exactly 100 months, so the interest buys you two and a half extra years.

How does the lottery annuity work?

Powerball and Mega Millions pay 30 annual payments that each rise 5% over the previous one, calibrated to sum to exactly the advertised jackpot. On a $100 million jackpot the first payment is about $1.5 million and the 30th is about $6.2 million, before taxes.

Why is the lottery lump sum so much smaller than the jackpot?

Because the advertised jackpot is the total of 30 future payments, not present-day cash. The cash option — typically about 45-52% of the headline number — is what the lottery would invest today to fund those payments. Neither option dodges taxes; both are taxed as income when received.

Can an annuity pay out forever?

If the payment is no larger than the interest the principal earns each month, the balance never shrinks — $100,000 at 6% generates $500 a month indefinitely. This calculator detects that case. Insurers sell a version of this as a life annuity, using mortality pooling to push the payment higher than pure interest alone.

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