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Investmentretirement

Annuity Payout Calculator

Annuity payouts against self-managed drawdown. An annuity buys certainty at the cost of return, and the return-of-purchase-price option costs about a percentage point of rate.

Also called: pension annuity calculator, nps annuity payout.

₹
%
%
Monthly payout
₹22,917

₹22,917 a month for life, ₹2,75,000 a year on a corpus of 50,00,000. Over 22 expected years that totals ₹60,50,000. Drawing the same amount from an invested corpus at 8% would last indefinitely, since the return exceeds the withdrawal rate.

Annual payout
₹2,75,000
Total over life expectancy
₹60,50,000
Expected years of payout
22
Years to recover the corpus
18.2
How long self-managed drawdown lasts
indefinitely, since the return exceeds the withdrawal rate
On the annuity type
Return of purchase price gives your nominee the capital back, which costs about a percentage point of rate.
How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

The annuity rate applied to the corpus gives the payout, guaranteed for life regardless of how long that is. The comparison shown is the honest one: an invested corpus drawing the same amount typically lasts longer than life expectancy at market returns, but only if the returns arrive and only if you do not outlive the money. The annuity removes that risk entirely, which is what you are paying for. Return of purchase price lowers the rate by roughly a percentage point because the insurer must return the capital.

the annuity rate applied to the purchase price
C
Corpus
r
Annuity rate

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

fifty lakh at sixty

Amount used to buy the annuity
₹50,00,000
Annuity rate
6.5%
Type
Life with return of purchase price
Age at purchase
60
If invested instead, return
8%
Life expectancy
82

Monthly payout₹22,917

6.5% less the 1 point for return of capital

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a plain life annuity pays the full rate

Amount used to buy the annuity
₹50,00,000
Annuity rate
6.5%
Type
Life annuity
Age at purchase
60
If invested instead, return
8%
Life expectancy
82

Monthly payout₹27,083

boundary

Open this example

Method and limits

What it assumes

  • A level annuity with no inflation indexation, which is the common form in India.

What it deliberately does not model

  • A level annuity loses purchasing power every year. At six percent inflation it halves in about twelve years.
  • Annuity income is fully taxable at slab in India.
  • This is a mechanical comparison, not advice on whether to annuitise.

Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator

Frequently asked questions

Is an annuity a good deal?
It buys longevity insurance, which no investment provides. The rate is below what markets have returned, and that gap is the price of certainty. Whether it is worth paying depends on your other income.
Why does return of purchase price pay less?
Because the insurer must give the capital back to your nominee, so it can pay out less along the way. It typically costs about a percentage point of rate.