Retirement Annuity Calculator
Turn your retirement savings into guaranteed income. See how much an annuity would pay each month and whether it beats the 4% withdrawal rule for your situation.
About this tool
An annuity trades the upside of market participation for the security of guaranteed income. For retirees who worry about outliving their savings, an annuity provides a floor — predictable income regardless of market performance.
How to use it
Quick steps to get the most out of this utility.
- 1
Enter your retirement savings
The lump sum you plan to annuitize (can be partial).
- 2
Set interest rate and period
Current annuity rate and how many years you want income.
- 3
Choose payment frequency
Monthly payments are most common for retirement income.
- 4
See guaranteed income
Monthly payment, total payout, and how it compares to portfolio withdrawal.
Annuities and the Retirement Income Floor
The biggest risk in retirement is outliving your money — 'sequence of returns risk.' An annuity eliminates this risk for the annuitized portion by guaranteeing income regardless of market conditions or how long you live (for life annuities). Financial planning research suggests that having guaranteed income covering basic expenses dramatically reduces financial stress in retirement and enables more aggressive investment of the remaining portfolio.
Frequently asked questions
Should I annuitize all my retirement savings?+
Most advisors suggest annuitizing 25-50% of assets to cover fixed expenses, while keeping the rest in flexible investments. The annuity floor ensures you can pay essential bills regardless of market performance. The remaining portfolio can grow and be used for discretionary spending or legacy goals.
How does an annuity compare to the 4% withdrawal rule?+
The 4% rule assumes you draw 4% of your portfolio annually (adjusted for inflation), which historically has a high probability of lasting 30 years. An annuity guarantees a specific income stream for the contract term, regardless of market returns. Annuities typically beat the 4% rule for longevity protection but lag it if you die early or markets perform well.
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