How to use this calculator
Pick what you want to know.
Growth shows what a fixed annuity, such as a MYGA, is worth at the end of its term:
- Initial deposit: the premium you pay the insurer.
- Added each year: optional. Most fixed annuities take a single premium, so leave this at $0 unless your contract allows additions.
- Guaranteed annual rate and Term: from your contract or quote.
Income shows the monthly payment a lump sum could support:
- Lump sum and Interest rate during payout: the rate is an assumption for comparison, not an insurer quote.
- Payments start: immediately, or after a number of years (deferred). During the wait, the lump sum grows at the same rate.
- Pay out for: a fixed number of years, or Life (estimate), which uses the IRS single life expectancy at the age payments begin.
The formulas
Growth uses compound interest, credited yearly at the guaranteed rate:
Income uses the level-payment formula, the same one behind a mortgage payment, with the balance paid down to zero:
Here P is the amount when payments start, i is the monthly rate equivalent to the annual rate, and n is the number of monthly payments, with the first one a month after payments begin.
Worked examples
A 5-year MYGA. You put $100,000 into a 5-year contract at a guaranteed 5%. After five years it is worth $127,628, so $27,628 of interest has built up tax-deferred.
Income for 20 years. A $250,000 lump sum at 5% pays $1,634.59 a month for 20 years. Over 240 payments you receive $392,302: your $250,000 back plus $142,302 of interest.
Income for life, starting at 65. The IRS single life expectancy at 65 is 22.9 years, so the calculator spreads $250,000 over 275 months. At 5% that’s about $1,513.19 a month.
Deferred for 10 years. Buy at 55 and start income at 65: the $250,000 grows to $407,224 first, and the lifetime estimate rises to about $2,464.83 a month.
What fixed annuities grow to
Value of $100,000 at a guaranteed rate, compounded yearly:
| Rate | 3 years | 5 years | 7 years | 10 years |
|---|---|---|---|---|
| 4% | $112,486 | $121,665 | $131,593 | $148,024 |
| 5% | $115,763 | $127,628 | $140,710 | $162,889 |
| 6% | $119,102 | $133,823 | $150,363 | $179,085 |
Monthly income per $100,000
Level monthly payments that use up $100,000 over the period:
| Payout period | 3% | 4% | 5% | 6% |
|---|---|---|---|---|
| 10 years | $963.74 | $1,009.06 | $1,055.24 | $1,102.24 |
| 15 years | $688.64 | $736.11 | $785.02 | $835.29 |
| 20 years | $552.57 | $602.22 | $653.84 | $707.29 |
| 25 years | $472.11 | $523.90 | $578.14 | $634.62 |
| 30 years | $419.42 | $473.30 | $530.06 | $589.37 |
These are what the money itself can support at each rate. They are not insurer quotes, which depend on the company, your age and sex, the features you choose and interest rates on the day you buy.
How to compare annuity quotes
- Compare the guaranteed rate and the term together. A higher rate with a longer surrender period ties your money up longer.
- Read the surrender schedule. Withdrawals above any free-withdrawal allowance during the term usually cost a percentage of the amount taken, and the charge typically declines each year.
- Check the insurer’s financial strength. Fixed annuities are only as strong as the insurance company behind them, plus your state’s guaranty association coverage, which has limits that vary by state.
- For income annuities, compare payout rates. Divide the annual income by the premium. The $250,000, 20-year example above pays 7.85% of the premium a year, part of which is your own money coming back.
- Look at inflation. A level payment buys less every year. At 3% inflation, a fixed payment loses about a quarter of its buying power in 10 years. The inflation calculator shows the effect.
For money you may need within a few years, a CD calculator comparison is worth running too: CDs often have smaller penalties for early withdrawal.
Assumptions and limitations
Growth mode credits interest once a year at a constant rate, with yearly additions at the end of each year. Income mode assumes a level monthly payment at the end of each month and a constant rate, with no fees, riders or inflation adjustments. The lifetime option is an estimate: it pays out over the IRS single life expectancy and stops there, while a real life annuity keeps paying as long as you live and is priced with insurer mortality tables. Results are before income tax and any surrender charges.
Sources
- IRS: Publication 575, Pension and Annuity Income
- IRS: Publication 590-B (2025), Appendix B, Single Life Expectancy table
- SEC Investor.gov: Annuities
- FINRA: Annuities
This calculator is for education and comparison only. It isn’t an offer, a quote or financial advice.
Frequently asked questions
How much does a $100,000 annuity pay per month?
It depends on the rate and how long payments last. At a 5% rate, $100,000 pays about $654 a month for 20 years or $1,055 a month for 10 years. A lifetime annuity from an insurer is priced with its own mortality tables and fees, so get quotes rather than relying on a formula.
What is a MYGA?
A multi-year guaranteed annuity is a fixed deferred annuity that locks in one interest rate for a set term, often 3 to 10 years. It works much like a CD issued by an insurance company, but the interest grows tax-deferred until you withdraw it. Early withdrawals above any free-withdrawal allowance usually trigger surrender charges.
Is an annuity better than a CD?
They solve similar problems differently. CDs are FDIC-insured up to the limit and taxed each year, while fixed annuities are backed by the insurer and state guaranty associations and grow tax-deferred. Annuity gains withdrawn before 59½ can also face a 10% additional tax, so annuities suit money you won't need until later.
What's the difference between an immediate and a deferred annuity?
An immediate annuity starts paying within about a year of purchase. A deferred annuity lets the money grow first and starts income later, which buys a larger payment because the balance has grown and fewer years of payments remain. This calculator lets you choose either.
How are annuity payments taxed?
For an annuity bought with after-tax money, part of each payment is a tax-free return of your premium and the rest is taxable interest, figured with an exclusion ratio. Annuities held in an IRA or 401(k) are generally fully taxable as ordinary income. Tax rules vary by contract type, so check your 1099-R or a tax professional.
Updated November 2026. Results are estimates for educational purposes and depend on the inputs you provide.