Enter your account balance, an assumed payout-phase rate, and how many years you want it to last — this amortizes the balance to zero by the end of that period.
This page's own default plans a $500,000 balance to reach exactly zero after 20 years, assuming it keeps earning 4% throughout. If the real return instead averages only 2% while the same $3,030 monthly payout keeps being withdrawn, the balance runs dry after about 16.2 years — nearly four years short of the plan, from a single rate assumption not holding up. The payout formula guarantees the math works out on paper; it cannot guarantee the assumed return actually shows up.
$500,000 ÷ 240 months would be $2,083 — noticeably less than this page's $3,030. The difference is the interest the remaining balance keeps earning throughout the drawdown: early payments are funded partly by that ongoing growth, not just by spending down principal, which is exactly why the total paid out over the full period ($727,176) comes to well more than the original balance. A 0% assumed rate is the one case where simple division and this formula agree.
A period-certain payout like this one is a math exercise: spend a known balance down to zero over a chosen number of years. It offers no protection if that person is still alive in year 21. See the Annuity Calculator for how a balance like this one accumulates during the working years, and the RMD Calculator for the different question of a mandatory minimum withdrawal the IRS sets, rather than a payout period chosen freely. The Present Value Calculator can value this entire payment stream as a single lump sum today, the same way an insurer would price the annuity that eventually pays it out.
A period-certain annuity payout amortizes the account balance the same way a loan is paid down, but in reverse: instead of solving for a loan payment that pays off a debt, it solves for the fixed monthly payment that fully depletes the account balance over the chosen number of years, assuming the remaining balance keeps earning the stated rate of return throughout. The formula is monthly payout = balance × i ÷ (1 − (1 + i)−n), where i is the monthly rate and n is the number of monthly payments.
A period-certain annuity pays out over a fixed, predetermined number of years regardless of how long the owner actually lives — if they live longer than the period, payments simply stop. A lifetime annuity instead uses actuarial mortality tables and pools risk across many annuity holders so it can guarantee payments for as long as the owner lives, however long that turns out to be. This calculator only models the period-certain, amortizing case — it doesn't incorporate mortality tables or lifetime guarantees.
Yes, by design. A period-certain payout is deliberately structured so the account balance reaches exactly zero at the end of the chosen period, assuming the stated rate of return holds steady the whole time — that's the entire point of amortizing it rather than just taking interest-only withdrawals. This is a key difference from a true lifetime annuity, which is specifically designed so payments can't run out no matter how long the person lives. See the RMD Calculator if you're instead trying to figure out a required minimum withdrawal rather than choosing your own payout period.
A higher assumed rate of return during the payout phase increases the monthly payment for a given balance and period, because the remaining, undrawn balance keeps earning more while it's being spent down. A longer payout period has the opposite effect on the monthly amount — spreading the same balance over more months lowers each individual payment, even though the total paid out over the full period may end up similar or higher due to the extra interest earned along the way.
Worked example: a $500,000 balance paid out over 20 years at a 4% annual rate during payout: monthly payout comes to roughly $3,030, or $36,359 per year. Over the full 20-year, 240-payment period, total payout adds up to about $727,176 — more than the original $500,000 balance, since the remaining funds kept earning interest throughout the drawdown. See the Annuity Calculator to see how a balance like this one accumulates in the first place.
To compare a payout stream against a lump-sum offer, discount it first with the present value calculator; the total of the payments is not the number to compare on.