How much monthly income can your annuity or retirement fund provide?
Formula: PMT = PV × r / [1 − (1+r)^(−n)] Where PV = balance, r = rate per period, n = total periods Total Received = PMT × n Interest Earned = Total Received − Initial Balance
Annuity Payout Options
Fixed Period: Payments for a set number of years. Higher payments, but money runs out.
Life Annuity: Payments for life. Insurance company bears longevity risk.
4% Rule: Withdraw 4% of balance year 1, adjust for inflation. ~30-year sustainability.