Input type
Retirement Planning
Annuity Pension Calculator
Calculate pension from an immediate or deferred annuity. Supports single life, joint life, and return-of-purchase-price options.
Immediate & deferred annuity
Joint life option
Return of purchase price
Best for
Annuity product comparison
Output
Annual & monthly pension
Enter annuity details
For return-of-purchase-price, the effective rate is reduced slightly (–0.5%) to reflect the insurer's cost of the guarantee.
Annuity pension calculator – detailed guide
This page is specific to annuity income planning. It helps you compare how immediate or deferred annuity timing, single-life versus joint-life structure, return-of-purchase-price options, taxable income and locked-in capital affect the pension you may actually receive.
1. Immediate and deferred annuities solve different problems
An immediate annuity is used when retirement income needs to start now. A deferred annuity is used when you want income to begin later and are willing to delay payouts in exchange for a potentially higher future pension.
This calculator lets you model both cases by changing when the annuity starts. That matters because the same corpus can produce very different income depending on start date and the annuity rate assumed.
2. Product design affects pension more than many retirees expect
A single-life annuity can pay more because it covers only one life. Joint-life options and return-of-purchase-price variants usually lower the periodic pension because the insurer is taking on additional obligations.
This page is useful because it forces that trade-off into numbers. A lower pension may still be appropriate if spouse protection or capital return to nominees is important to you.
3. The annuity rate assumption is the key sensitivity input
The pension estimate here depends heavily on the annuity rate you assume. Small changes in the quoted rate can noticeably change monthly income, especially when the purchase price is large.
The right way to use the calculator is to test realistic rate ranges and then compare them with actual insurer quotes before making a final decision.
4. Tax and liquidity reduce the spendable value of annuity income
Annuity income is generally taxable as regular income, and most annuity products offer limited or no exit flexibility after purchase. So the headline monthly pension is not the same as your spendable and reversible cash flow.
This is why annuities are usually best used for the portion of retirement capital you are comfortable locking in for predictable income.
5. Use annuities as a specific income layer, not a total retirement strategy
This calculator is best used to decide how much of your retirement corpus should be converted into guaranteed pension. It should not be read as a recommendation to annuitize all retirement assets.
Keep matching the annuity estimate against your other retirement tools so that guaranteed income, flexible withdrawals and long-term liquidity remain balanced.
Annuity FAQ
What annuity rate should I use?
Current annuity rates in India range from 5.5% to 7.5% depending on the insurer, age, and annuity variant. Check with LIC and private insurers for current quotes.
Does a joint-life annuity usually pay less than a single-life annuity?
Yes. Because the insurer is covering a longer or broader payment obligation, the regular pension is usually lower than a comparable single-life option.
Will return-of-purchase-price reduce the pension amount?
Usually yes. If the original purchase price is to be returned to nominees, the insurer generally offers a lower periodic pension.
Is annuity income taxable?
Yes. Annuity income is fully taxable as income from other sources in the year of receipt under the Income Tax Act.
Can I surrender an annuity?
Most immediate annuities cannot be surrendered after purchase. This is one reason why you should compare carefully before committing.