About Annuity Calculator

Calculate annuity payments, present/future values, and payment schedules. Part of the DevTools Surf developer suite. Browse more tools in the Calculators collection.

Use Cases

• Calculate retirement income from a fixed annuity purchased with a lump sum
• Determine present value of a structured legal settlement
• Plan savings contributions needed to reach a retirement target
• Compare lease vs buy decisions using equivalent annuity analysis

Tips

• Switch between ordinary annuity (payments at end of period) and annuity-due (payments at start) — the difference affects present value meaningfully
• Use the future value mode to calculate how much a series of savings contributions will grow to
• The payment schedule table shows the interest vs principal breakdown for each period

Fun Facts

• Annuities were used in ancient Rome: the word comes from Latin 'annus' (year). Roman soldiers received annual payments from the state — a structure recognizable as a fixed annuity.
• The largest private annuity contract ever issued was for $2.5 billion by New York Life in 2019, covering a corporate pension obligation.
• Variable annuities grew to over $2.5 trillion in assets in the US by 2022, though their complex fee structures and surrender charges make them one of the most frequently mis-sold financial products.

FAQ

What is the difference between an ordinary annuity and an annuity-due?

An ordinary annuity has payments at the end of each period (most loans, mortgages). An annuity-due has payments at the beginning (rent, insurance premiums). Annuity-due has a slightly higher present value because each payment is discounted one fewer period.

Can I use this for retirement planning?

Yes — enter your target monthly income, expected rate of return, and years in retirement to find the lump sum needed to purchase that income stream. For variable returns, use Monte Carlo simulation tools instead.

What discount rate should I use?

Use your expected investment return for savings calculations, or the insurer's quoted rate for purchased annuities. The rate has a large impact on results — even a 1% difference changes present value by 10-15% over 20 years.