Annuity Calculator
Turn a retirement corpus into a guaranteed income for life — with the option, inflation and coverage picture.
Plan your annuity
Older buyers are offered a higher rate — the expected payout period is shorter.
Gender
Annuity option
Joint-life and return-of-price options pay a lower rate.
Payment frequency
Results update live — calculations run in your browser, no signup.
₹28,750/mo
A ₹50.00 L life annuity (single life) at age 60 pays an illustrative 6.9% a year, guaranteed for life
How your corpus becomes income
Corpus
₹50.00L
purchase price
Income
₹28.8K
monthly, for life
Your pension recovers the full ₹50.00 L purchase price in 14.5 years — at age 74. Every payment after that is pure gain.
Illustrative IRDAI-style rate by age, gender & option — not a live quote. A level payout, taxable as income. Not guaranteed.
Same ₹50.00 L at age 60: higher income vs. covering a spouse vs. preserving your capital — illustrative rates, not live quotes.
₹28,750/mo
₹26,458/mo
₹22,708/mo
Joint life benefits
Single life
₹28,750/mo
stops at your death
Joint life
₹26,458/mo
continues to spouse
You give up ₹2,292/mo (8% less) so your spouse keeps receiving the pension for the rest of their life. Worth it if they have no separate income.
Return of purchase price impact
Life annuity income
₹28,750/mo
corpus not returned
ROP income
₹22,708/mo
+ ₹50.00 L to nominee
ROP pays ₹6,042/mo less (21% lower) but returns your entire ₹50.00 L to your nominee. You trade income for an inheritance — the capital is never lost.
How much will you get?
Monthly pension by purchase amount, at your 6.9% rate (life annuity (single life), age 60).
| Purchase amount | Annual income | Monthly income |
|---|---|---|
| ₹25.00 L | ₹1.73 L | ₹14,375 |
| ₹50.00 L | ₹3.45 L | ₹28,750 |
| ₹1.00 Cr | ₹6.90 L | ₹57,500 |
| ₹2.50 Cr | ₹17.25 L | ₹1.44 L |
| ₹5.00 Cr | ₹34.50 L | ₹2.88 L |
Highlighted row matches your purchase amount. Income scales linearly with the corpus at a fixed rate.
Every ₹100 of corpus
Annual income it generates vs. the capital that stays locked in the annuity.
Every ₹100 you annuitise pays ₹6.90 a year for life. The capital itself stays with the insurer.
Annuity vs a Fixed Deposit
Lifetime guarantee vs. interest you must keep renewing.
Annuity
- Pays for life — no reinvestment risk
- Rate locked at purchase
- Can cover a spouse / return capital
- Corpus usually locked in
Fixed Deposit
- Principal stays accessible
- Rate resets on renewal
- Reinvestment risk if rates fall
- No lifetime guarantee
A 6.9% annuity pays ₹28,750/mo for life regardless of where rates go; an FD pays only as long as you keep renewing it at the prevailing rate.
Prices rise over 25 years — the same ₹28,750/mo buys less. Toggle inflation into the picture:
Inflation impact — severe erosion
₹28,750/mo today buys only about ₹6,699 in 25 years — a fixed annuity loses ~77% of its buying power. Over this many years a fixed income buys far less by the end. Weigh an increasing or inflation-indexed plan.
At 6.0% inflation, the fixed ₹28,750/mo pension buys about ₹6,699 worth of goods in 25 years — roughly 77% less. Annuity income is usually not inflation-linked.
Retirement income gap
Required income vs. what this annuity provides.
Need
₹50,000
Annuity gives
₹28,750
Gap
₹21,250
This annuity covers 57% of your target. To plug the ₹21,250/mo gap for 25 years you'd need roughly ₹30.34 L more corpus.
Retirement income dashboard
Annuity + other sources vs. your monthly target.
You're ₹1,250/mo short of your ₹50,000 target — a larger annuity corpus or extra savings closes it.
- ₹28,750/mo for life at 6.9%.
- Recovers your corpus in 14 years.
- Worth ₹6,699/mo in 25y after inflation.
What this means
A ₹50.00 L life annuity (single life) bought at age 60 pays a guaranteed ₹28,750/month for life at an illustrative 6.9% rate, recovering your purchase price in about 14 years. Because the income is level, at 6.0% inflation it's worth roughly ₹6,699/month in today's money by year 25 — treat it as a secure income floor, not a full inflation-proof plan.
Key takeaways
- Monthly income: ₹28,750 for life
- Annuity rate: 6.9% (age 60, male, life annuity (single life))
- Purchase price: ₹50.00 L
- Break-even: 14.5 years (age 74)
- Real value in 25y: ₹6,699/mo
Start investing in mutual funds
Open a free account with ICICI Prudential AMC and start an SIP online. ICICI Prudential Mutual Fund, at no extra cost to you.
Your plan: a ₹50.00 L corpus at age 60 → about ₹28,750/month for life.
Plan the rest of your money life
Build the corpus that buys this pension — NPS, a retirement plan, a withdrawal strategy or provident fund.
The annuity rates here are illustrative IRDAI-style reference bands by age, gender and option — not live quotes or guarantees.A real insurer's rate depends on the plan and prevailing interest rates at purchase. The payout modelled is level (not inflation-linked), and annuity income is usually taxable. Treat every figure as a planning estimate and confirm the exact terms with the provider before committing.
How an annuity income is calculated
Income = Corpus × Annuity rate
- Income
- annual pension paid to you
- Corpus
- one-time purchase price
- Annuity rate
- % of corpus paid per year, set by the insurer
Worked example
With your inputs — a ₹50.00 L purchase price at an illustrative 6.9% (life annuity (single life), age 60) — the annual income is ₹50.00 L × 6.9% = ₹3.45 L/yr, or ₹28,750 a month. Behind that rate sits a present-value calculation, PV = PMT × (1 − (1 + r)⁻ⁿ) / r, where the insurer sets the rate so your corpus equals the value of all future payments over your expected lifetime — older buyers get a higher rate because n (the payout period) is shorter. The income is fixed at purchase, so it never falls (and, on a level plan, never rises with inflation). The corpus stays with the insurer, which is the trade for a guaranteed lifelong income.
Most asked annuity questions
An annuity is a contract where you hand an insurer a lump sum (the purchase price) and they pay you a regular income — usually for the rest of your life. The income is the purchase price multiplied by the annuity rate the insurer quotes, paid out monthly, quarterly or yearly. Unlike drawing down savings yourself, a lifetime annuity keeps paying however long you live, so it removes the risk of outliving your money.
The rate (the % of your purchase price paid as annual income) depends mainly on your age when you buy, the option you pick, and prevailing interest rates. Older buyers get a higher rate because the expected payout period is shorter; joint-life and return-of-purchase-price options pay a lower rate because they promise more. The rates shown here are illustrative IRDAI-style reference bands, not live quotes — always get a current quote from the insurer.
A single life annuity pays the highest income but stops when you die. A joint-life annuity pays a lower income but continues to your spouse after you. Return of purchase price pays the lowest income but returns your entire corpus to your nominee at death, so nothing is lost. The right choice depends on whether you need to provide for a spouse or leave the capital behind.
Usually no. A standard immediate annuity pays a level (fixed) income for life, so its buying power falls every year as prices rise. At 6% inflation, a fixed pension is worth roughly half in 12 years. Some insurers offer increasing annuities that step up each year, but they start with a much lower first-year income. This calculator models a level annuity and shows the inflation impact separately.
Generally yes — annuity payouts are taxed as income in the year you receive them, and rules vary by country and plan. The figures here are gross (before tax). For a return-of-purchase-price annuity, the capital returned to your nominee is usually tax-free, but the regular income is still taxable. Confirm the exact treatment for your plan and jurisdiction.
The complete guide to annuities
What an annuity actually does
An annuity turns a retirement corpus into a guaranteed income for life. You pay an insurer a one-time purchase price and they pay you a fixed pension — the purchase price multiplied by the annuity rate. The key advantage over drawing down savings yourself is that a lifetime annuity keeps paying however long you live, removing the risk of outliving your money.
How the income is calculated
The annual income is simply the corpus times the annuity rate: a ₹50.00 L purchase price at 6.9% pays ₹3.45 L a year, or ₹28,750 a month. Behind that rate sits a present-value calculation — PV = PMT × (1 − (1 + r)⁻ⁿ) / r — where the insurer sets the rate so your corpus equals the value of all future payments over your expected lifetime. Older buyers get a higher rate because the expected payout period is shorter.
Choosing between the options
A single life annuity pays the highest income but stops when you die. Joint-life pays a lower income but continues to your spouse afterwards. Return of purchase price pays the lowest income but hands your entire corpus back to your nominee at death. Each lower rate is the price of a bigger promise — covering a second life, or preserving your capital. Match the option to whether you need to provide for a spouse or leave the money behind.
The inflation problem with a level income
The biggest risk to a standard annuity is inflation. A level payout that feels comfortable today buys steadily less each year: at 6.0% inflation, the ₹28,750/mo here is worth only about ₹6,699 in today's money by year 25 — roughly 77% less buying power. Increasing annuities step up each year but start far lower, so many retirees pair a level annuity with some growth-oriented savings.
Annuity vs FD, and where it fits
A fixed deposit keeps your principal accessible but its rate resets on renewal, exposing you to reinvestment risk if rates fall. An annuity locks the rate for life and never needs renewing, but the corpus is usually tied up. Most retirees use an annuity for a secure income floor — enough to cover essentials — and keep the rest in more flexible, growth-oriented investments.
What this calculator does and doesn't guarantee
The rates shown are illustrative IRDAI-style reference bands by age, gender and option — not live quotes. A real insurer's rate depends on the plan and the prevailing interest environment at purchase, and the income is taxable. The figures here are gross planning estimates, not advice. Always get a current quote and confirm the exact terms, options and tax treatment with the provider before committing.