Free fixed annuity calculator
Enter a lump-sum premium, a guaranteed rate and a payout period to see the level monthly income a fixed annuity would pay — with the total payouts and the interest earned over the term, updated live, as you type.
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Estimates only, based on a constant growth and payout rate. Not financial or tax advice.
Results are estimates. Consult a professional.
What is a fixed annuity?
A fixed annuity is a contract with an insurance company that guarantees a set interest rate on your money and, when you are ready, turns that money into a predictable stream of payments. The defining feature is the word fixed: the insurer locks in the crediting rate, so your balance grows by a known amount and the income it later pays does not rise or fall with the stock market. This fixed annuity calculator takes the lump sum you put in (the premium), the guaranteed rate, and the number of years you want income for, and returns the level monthly payment the contract would pay.
That guaranteed rate is what sets a fixed annuity apart from its siblings. A variable annuity ties your return to investment sub-accounts that can lose money; an immediate annuity skips the growth phase and starts paying at once. A fixed annuity sits between them — money grows at a contractual rate first, then converts to income — which is why it is often chosen by savers who want certainty over upside.
FINRA: a fixed annuity guarantees a minimum rate of interest while your account grows and a fixed amount of periodic payments once you annuitize.How the fixed annuity calculator works
Once a fixed annuity is annuitized, the insurer solves an annuity-payout equation: given your premium, a fixed monthly rate, and a fixed number of payments, what level amount can be paid each month so the money plus its guaranteed interest runs out exactly at the end of the term? That is the same present-value-of-an-annuity formula a pension or amortized loan uses, run in reverse.
- Enter the premium. The lump sum you place in the contract — often a rollover from a 401(k), IRA, or maturing CD.
- Set the guaranteed rate. The fixed interest rate the insurer credits. Confirm whether the quote is a teaser first-year rate or the rate guaranteed for the full term.
- Choose the payout period. The number of years you want income. A longer period spreads the same premium thinner, so each monthly check is smaller.
Fixed vs. immediate vs. variable annuity
The three annuity types answer different questions. A fixed annuity asks how much guaranteed income a lump sum can produce at a locked rate. An immediate annuity asks how much income starts right now from a single premium. A variable annuity asks how much income a market-linked balance might produce — with the chance of more, and the risk of less.
| Fixed annuity | Immediate annuity (SPIA) | Variable annuity | |
|---|---|---|---|
| Return | Guaranteed fixed rate | Guaranteed, baked into the payout factor | Varies with sub-account performance |
| When income starts | After a deferral/growth phase | Right away (within ~1 year) | After a deferral phase |
| Market risk | None — insurer bears it | None once payments begin | You bear it |
| Best for | Savers who want rate certainty | Retirees who need income now | Investors who want growth potential |
Source: FINRA and SEC Investor.gov annuity overviews. All three are insurance contracts; only the variable annuity exposes principal to market loss.
A worked example using the fixed annuity calculator
A 62-year-old rolls a maturing CD of $250,000 into a fixed annuity guaranteeing 4%, and wants level income for 25 years. What does the contract pay each month?
Step 1 — Convert the rate and term
The monthly rate is 4% ÷ 12 = 0.003333. The number of payments is 25 × 12 = 300.
Step 2 — Solve the payout
Monthly payout = $250,000 × 0.003333 ÷ (1 − 1.003333^−300) = $1,319.59. Because the rate is fixed, every one of the 300 payments is exactly this amount.
Step 3 — Read the total
Total payouts are $1,319.59 × 300 = $395,878. The $145,878 above the premium is the guaranteed interest the contract paid out over the 25 years.
Monthly income per $100,000 premium by rate
The table below shows the level monthly income a fixed annuity pays per $100,000 of premium over a 25-year payout, at several guaranteed rates. Multiply by your premium in hundred-thousands to scale it — at $250,000, multiply the figure by 2.5.
| Guaranteed rate | Monthly income per $100k | Total paid per $100k (25 yr) |
|---|---|---|
| 2% | $423.85 | $127,156 |
| 3% | $474.21 | $142,263 |
| 4% | $527.84 | $158,351 |
| 5% | $584.59 | $175,377 |
| 6% | $644.30 | $193,290 |
Figures use the same payout formula as the calculator, 25-year (300-payment) term. The higher total at higher rates is the extra guaranteed interest earned over the period.
Who a fixed annuity suits — and who should look elsewhere
- Good fit: a retiree or near-retiree who wants a guaranteed rate and predictable income, and who values not watching the market.
- Good fit: a saver rolling over a CD or low-yield bond who wants a higher contractual rate plus tax-deferred growth.
- Reconsider: someone who needs the money liquid — surrender charges can apply for the first several years.
- Reconsider: a younger investor with a long horizon who can tolerate market swings; a variable annuity or a diversified portfolio may grow more.
Common fixed annuity mistakes
- Confusing the teaser rate with the guaranteed rate. Some contracts advertise a high first-year bonus rate that drops afterward. This calculator assumes one rate for the whole term — confirm yours does too.
- Ignoring surrender charges. Pulling money out during the surrender period (often 5–10 years) triggers a penalty that can erase a year or more of interest.
- Overlooking inflation. A level fixed payment buys less each year. At 3% inflation, $1,319 today has roughly half the purchasing power in 24 years.
- Forgetting the 10% early-withdrawal tax. Earnings taken before age 59½ generally face a 10% IRS penalty on top of ordinary income tax.
Fixed annuity definitions
How accurate is this fixed annuity estimate?
The math is exact for a level-rate, level-payment contract, but real fixed annuities carry details this estimate does not model: first-year bonus rates, surrender-charge schedules, optional riders, fees, and the tax treatment of each payment. A real quote also reflects your age and the carrier's current rates.
Treat the result as a planning estimate of guaranteed income from a lump sum — not a contract illustration or financial advice. Ask the insurer for a full illustration and confirm the guaranteed rate, the term, and the surrender schedule before you commit.
FINRA — Annuities: types, features, and what to ask before you buy.SEC Investor.gov — Annuities investor bulletin.Frequently asked questions about the free fixed annuity calculator
About this Fixed annuity calculator
This fixed annuity calculator runs entirely in your browser — the premium, rate and term you enter are never stored or sent anywhere. It converts a lump-sum premium into level guaranteed monthly income using the standard annuity-payout formula (monthly = premium × r ÷ (1 − (1 + r)^−n)). It is a planning estimate of guaranteed income, not a contract illustration, an insurance quote, or financial advice.
It is one of our free insurance calculators. Compare it with the immediate annuity and variable annuity calculators, or browse the complete calculators directory.