Find out how much income a lump sum can pay out each period over a set number of years, including interest earned on the remaining balance. Plan a retirement drawdown or structured payout.
Income from a lump sum
The annuity payout (or drawdown) calculation tells you how much equal income a lump sum can provide over a fixed number of years while the remaining balance keeps earning interest. It's the reverse of saving: instead of building a balance with deposits, you draw it down with withdrawals. The math is the same amortization formula used for loans — your balance behaves like a loan the "bank" (you) is repaying to yourself.
For example, a $500,000 balance earning 5% paid out monthly over 25 years provides about $2,923 per month — roughly $877,000 in total payouts, of which $377,000 is interest earned along the way. A higher rate or shorter period raises each payment; a longer period lowers it. This is useful for planning retirement withdrawals, structured settlements, or any fixed-term income stream.
Convert a lump sum into a steady paycheck for a fixed number of years while the balance keeps earning.
Because the unpaid balance keeps earning, total payouts exceed the starting balance — the gap is interest earned.
Higher rates and shorter terms mean larger payments; longer terms stretch a balance into smaller, longer-lasting income.