Fixed Annuity Annual Payout
Annual payment from a fixed annuity given a starting balance, interest rate, and payout period.
What is Fixed Annuity Payout?
A fixed annuity converts a lump-sum balance into a series of equal annual payments over a defined period. The payout formula is identical to the present-value annuity factor in reverse: the balance is amortized at the stated interest rate over the chosen number of periods. Fixed annuities are commonly used to provide predictable retirement income without longevity risk for a set term, making them distinct from lifetime (life) annuities which pay until death.
Formula
PMT = Balance × [r / (1 − (1 + r)^−n)]
Worked Example
Worked example — Hypothetical retiree
2026
Step 1 Annuity balance: $500,000
Step 2 Interest rate: 4%, Payout period: 20 years
Step 3 PMT = $500,000 × [0.04 / (1 − 1.04^−20)]
Step 4 PMT ≈ $500,000 × 0.07358 ≈ $36,790/yr
Step 5 → A $500K fixed annuity at 4% pays ~$36,790/yr for 20 years
Source: Investopedia — Annuity (2026-01-01)
Calculate Fixed Annuity Payout
Annual Payment
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Not investment advice.
How to Interpret Fixed Annuity Payout
< 20000
Low Payout — may need to supplement with other income
20000 – 50000
Moderate Payout — covers basic retirement expenses
50000 – 100000
Comfortable Payout — solid retirement income base
> 100000
High Payout — well-funded retirement annuity
Sources