Retirement
Link copied!
Annuity Calculator
Estimate the monthly payout you'd receive from an annuity purchase. Adjust any input below and your results update instantly.
Understanding annuities
The concept, the motivation, and what to watch out for.
What is an annuity?
An annuity converts a lump sum into a guaranteed stream of regular payouts. You hand over a purchase price once — often a retirement corpus — and receive a fixed monthly income in return, calculated so the sum (plus what it earns) is paid out exactly over your chosen term.
This calculator models a self-directed version of that trade: choose a lump sum, an annuity rate, a payout term, and optionally a deferment period before payouts start, and see the guaranteed monthly income it implies.
Guaranteed income, not growth
Annuity rates are typically lower than what a market-linked investment might earn, because you're trading upside for a guaranteed, predictable payout.
Deferment lets your lump sum grow first
Delaying when payouts start gives your purchase price more time to compound at the annuity rate — meaningfully raising the eventual monthly payout.
How this calculator helps
Enter your lump sum, rate, and payout term — see the monthly payout, how your balance moves over time, and how each input changes it.
Calculate your annuity payout
Fill in the starred fields on the left — your results update instantly on the right.
Your details
≈ ₹50.00 L
e.g. ₹50,00,000 lump sum
e.g. 6.5% guaranteed annuity rate
e.g. 20 years of payouts
e.g. 0 years for an immediate annuity
How these compare
vs. typical India long-term ranges
Annuity rate: 6.5%
Typical Indian annuity rate: 5–7.5%
Payout period: 20 years
Typical retirement horizon: 15–25 years
These are example numbers. Edit any input on the left to see your own.
Your estimated monthly payout is
₹37,279/mo
for 20 years
Amount annuitized
₹50.00 L
Total payout received
₹89.47 L
Balance vs. payout received that year
Remaining balancePayout that year
Year-by-year breakdown
"Deferred" means payouts haven’t started yet; "Paying out" means your balance is being drawn down.
YearRemaining balancePayout that yearStatus
0₹50.00 L₹0
Paying out
100% of annuitized value remaining
3₹45.96 L₹4.47 L
Paying out
92% of annuitized value remaining
6₹41.05 L₹4.47 L
Paying out
82% of annuitized value remaining
9₹35.09 L₹4.47 L
Paying out
70% of annuitized value remaining
12₹27.85 L₹4.47 L
Paying out
56% of annuitized value remaining
15₹19.05 L₹4.47 L
Paying out
38% of annuitized value remaining
18₹8.37 L₹4.47 L
Paying out
17% of annuitized value remaining
20₹0₹4.47 L
Depleted
0% of annuitized value remaining
Compare scenarios
See how deferring longer or a higher rate would move your monthly payout.
Your plan
6.5% · 0y defer
₹37,279/mo
Monthly payout
Baseline
Defer +5y
6.5% · 5y defer
₹51,075/mo
Monthly payout
+₹13,796/mo
Rate +1%
7.5% · 0y defer
₹40,280/mo
Monthly payout
+₹3,001/mo
Worked example, using your numbers
A step-by-step walkthrough of how your lump sum becomes your monthly payout.
Step 1 · Amount annuitized
With no deferment period, your full ₹50.00 L lump sum is annuitized immediately as
₹50.00 L
Step 2 · Monthly payout
Paid out over 20 years (240 months), that becomes
₹37,279/mo
Step 3 · Total received
Across the full payout term, you’ll receive
₹89.47 L
✓
Your ₹50.00 L lump sum becomes a guaranteed ₹37,279/mo for 20 years.
Personalised insights
What your numbers reveal, and what changing them would do.
Your ₹50.00 L lump sum pays out ₹37,279/mo for 20 years
Payouts start immediately, annuitizing your full purchase price.
You'll receive ₹89.47 L in total
That's ₹39.47 L more than your ₹50.00 L purchase price, earned via the 6.5% annuity rate over the full term.
Deferring 5 more years would raise your payout to ₹51,075/mo
Letting your lump sum compound for 5 years before payouts start, instead of 0, meaningfully grows the amount eventually annuitized.
A 7.5% annuity rate would raise your payout to ₹40,280/mo
Even without changing your lump sum or term, shopping for a higher annuity rate directly increases your monthly income.
How this is calculated
Every step of the math behind your result, shown in the open.
Amount annuitized
P = purchase price, r = annuity rate, d = deferment years, A = amount annuitized
If payouts are deferred, your purchase price (P) keeps compounding at the annuity rate (r) for the deferment period (d) before being converted into payouts.
Example: ₹50.00 L growing at 6.5%/yr for 0 years → ₹50.00 L annuitized
Your monthly payout
A = amount annuitized, r_m = monthly annuity rate, N = payout months, M = monthly payout
This is the same fixed-payment annuity formula behind a loan EMI, just with the roles reversed — instead of paying down a loan, the amount annuitized (A) pays out to you until fully exhausted after N months.
Example: ₹50.00 L paid out over 20 years (240 months) at 6.5%/yr → ₹37,279/mo
Total payout received
M = monthly payout, N = payout months, Total = total payout received
Multiplying your monthly payout by the number of months it runs gives the total amount you'll receive over the full payout period.
Example: ₹37,279/mo × 240 months → ₹89.47 L total payout
Assumptions
- The annuity rate stays constant across both the deferment and payout phases.
- The monthly payout is fixed — it doesn't step up with inflation over the term.
- Figures are indicative and pre-tax — not financial advice.
Did you know?
A few facts behind annuities and guaranteed income.
NPS
India's NPS mandates partial annuitization
At least 40% of your National Pension System corpus must be used to purchase an annuity at retirement, guaranteeing you a minimum lifelong income stream.
EMI
An annuity is a loan EMI in reverse
Both use identical fixed-payment math — a loan pays down a balance you owe, while an annuity pays out a balance you're owed, at the same underlying formula.
Defer
Waiting to start payouts can raise them meaningfully
Every extra year of deferment compounds your lump sum before it's converted into payouts — often the simplest lever to increase your eventual monthly income.
Trade-off
Guaranteed income comes at the cost of upside
Annuity rates are typically set conservatively, since the provider is guaranteeing your payout regardless of how their underlying investments actually perform.
Frequently asked questions
Straight answers to the questions we hear most about annuities.
How is my monthly annuity payout calculated?
Your lump sum (grown through any deferment period) is divided into a fixed monthly payout sized so that, combined with the annuity rate it keeps earning, the balance is fully paid out by the end of your chosen payout term — the same math as a loan EMI, just in reverse.
Why are annuity rates usually lower than other investments?
Annuities guarantee a fixed payout regardless of how markets perform, so providers typically invest conservatively and price in a lower, safer rate rather than chasing higher but uncertain returns.
What does the deferment period do?
During deferment, no payouts are made and your lump sum keeps compounding at the annuity rate. A longer deferment means a smaller pool of money to start with grows for longer, usually raising your eventual monthly payout.
Can I approximate a 'for life' annuity with this calculator?
Set the payout period close to your expected remaining lifespan. Note this is a straightforward self-directed drawdown calculation — actual insurance annuity-for-life products price in mortality pooling across policyholders, which this calculator doesn't model.
Does this account for taxes?
No, figures here are indicative and pre-tax. Actual annuity payouts are typically taxed as income — check current tax rules for the specific product you're considering.
Is this financial advice?
No. This tool provides indicative estimates based on your assumptions. Consult a certified financial advisor before purchasing an annuity product.
Related calculators
Other tools worth checking as you plan your retirement income.
RRetirement
Retirement Corpus Calculator
Find out how large a corpus you need to retire comfortably.
Try it
SInvestments
SWP Calculator
Plan a systematic withdrawal from your corpus and see how long it lasts.
Try it
NSavings
NPS Calculator
Project your National Pension System corpus and expected annuity.
Try it
FRetirement
FIRE Calculator
Find the age you could financially retire based on your savings rate.
Try it
Learn more
Articles to go deeper on the ideas behind this calculator.
Fundamentals
How annuities work in India
Immediate vs deferred annuities, and how providers price the payout.
6 min read
Retirement
NPS annuitization rules explained
Why 40% of your NPS corpus must buy an annuity, and what your options are.
5 min read
Comparison
Annuity vs SWP: which gives more income?
Comparing a guaranteed annuity payout against a market-linked SWP.
5 min read