How to use it
- Enter Principal.
- Enter Your age.
- Enter Assumed rate %.
The formula
Payment amortizes principal over remaining life expectancy.
Worked example
About this calculator
A lifetime annuity converts a lump sum into income that continues for as long as you live. The insurer pools many customers: those who live longer are effectively paid by those who don't, which is why a life annuity usually pays more per month than drawing the same pot yourself over a cautious 30-year horizon.
The two levers that move the payment most are your age at purchase and interest rates at the time. Buying later means fewer expected payment years and a higher monthly amount; higher market rates raise payouts across the board. Use the calculator to see both effects, then compare against real quotes.
Frequently asked questions
How is life expectancy estimated?
From average remaining-years tables by age. Real insurers price with detailed mortality data, so quotes will differ.
Single or joint life?
This models a single life. Joint-life annuities pay less per month because they pay longer.
Is the income guaranteed?
Only an insurer can guarantee income. This tool shows the arithmetic, not an offer.
Tips
- Start early; a decade of compounding is hard to replace.
- Always capture any employer match in full.
- Revisit your plan yearly as income changes.
Key terms
- Nest egg
- Total retirement savings.
- Drawdown
- Withdrawing from a pot over time.
- Match
- Employer contributions to your plan.