Annuity Calculator

Convert abstract savings into concrete income. A ₹1 crore retirement corpus sounds impressive, but most people do not instinctively know whether it will generate ₹40,000 or ₹80,000 per month. The annuity calculator makes the number tangible and actionable.

Model different rate and duration scenarios. What if annuity rates fall from 6.5% to 5.5% by the time you retire? What if you plan for 25 years of retirement instead of 20? Small changes in rate or duration produce surprisingly large differences in monthly income, running the scenarios takes seconds.

Reverse-plan your corpus target. Most retirement planning starts with a target income and works backwards to the required corpus. Enter your desired monthly pension and let reverse mode calculate exactly how much you need to save. This gives you a precise savings target to plug into a SIP Calculator for your accumulation phase planning.

Compare annuity income to SWP income. An annuity exhausts the corpus precisely over the defined period. An SWP from a mutual fund depends on actual returns. The annuity calculator gives you the "guaranteed" baseline; compare it with your SWP Calculator projections to decide how much risk you want to take with retirement income.

NPS subscribers approaching retirement who want to understand the income their annuity purchase will generate. Enter the 40% of your projected NPS corpus as the annuity amount, set the rate to current annuity rates (5.5–7%), and choose "life annuity" duration (typically modelled as 25–30 years). The output tells you your monthly pension from the mandatory annuity portion.

EPF and gratuity recipients who receive large lump sums at retirement and need to plan how to draw income. A ₹30–50 lakh EPF corpus invested in a senior citizen savings scheme or FD can be modelled as an annuity to understand the monthly income available.

Pre-retirees in their 40s and 50s who want to reverse-engineer their required corpus. If your retirement income goal is ₹60,000 per month for 25 years, this calculator tells you exactly how large a corpus you need, then you can build towards that target using the Retirement Calculator.

Insurance policy buyers evaluating immediate annuity products from LIC, HDFC Life, or SBI Life. Insurers quote different annuity rates, enter each offer into the calculator to compare the actual monthly income each generates from your premium, rather than relying on the insurer's brochure.

Financial advisors and planners structuring retirement income for clients with multiple corpus sources (EPF + NPS + mutual funds + property rental). The annuity calculator helps model the guaranteed income component while other assets handle variable returns.

Periodic Payout is the highlight output, the fixed amount you receive each payment period (monthly, quarterly, etc.) calculated to draw your corpus to zero over the annuity duration. This is the number that defines your retirement lifestyle. If it is lower than your expected monthly expenses, you need either a larger corpus or a higher return rate.

Total Payouts Received is the sum of all periodic payments over the full annuity duration. It is always higher than the original corpus (when the interest rate is above zero) because you also receive the returns earned on the uninvested balance. Total Payouts minus Corpus equals your Total Interest Earned, the income your money generates beyond the principal.

Total Interest Earned reveals how much your corpus earns in returns over the annuity period. This number grows with higher interest rates and longer durations, a reminder that even in a drawdown phase, your money continues to compound on the remaining balance. A well-structured annuity at 6.5% over 20 years can generate 60–70% of the original corpus in additional interest income.

The pie chart visualises the split between corpus (your own savings) and total interest earned (returns on that savings) in the total payout, showing how much of your retirement income is actually funded by investment returns versus your own accumulated savings.

1. Enter your Corpus Amount, the total lump sum you are investing in the annuity. This could be your NPS corpus portion, EPF maturity amount, insurance proceeds, or any retirement savings. Enter ₹50,00,000 for a ₹50 lakh corpus.

2. Set the Annual Interest Rate, the rate you expect the annuity to earn. For insurance company annuities, use the rate quoted in your policy (typically 5.5–7%). For self-managed drawdown from FDs or debt funds, use the expected post-tax return. For senior citizen savings schemes, the current rate is 8.2% p.a.

3. Choose the Annuity Duration, how many years you want the income to last. For retirement planning, use your life expectancy minus your retirement age (e.g. plan for 25–30 years if retiring at 60, assuming life expectancy of 85–90).

4. Select the Payout Frequency, monthly for regular household expenses, quarterly if you prefer managing larger amounts, or annually for institutional or large-corpus scenarios.

5. Read your Periodic Payout, this is your pension income per period. If it falls short of your expense target, either increase the corpus (using reverse mode), increase the assumed rate (by choosing higher-yield instruments), or reduce the duration.

6. Use Reverse Mode to back-calculate your required corpus, enter your target monthly payout to see exactly how large a corpus you need to fund it.