Annuity Payment Calculator
You have a lump-sum nest egg — or a single-premium annuity policy — and you want to draw a steady cheque every month (or every year) for a set number of years without running out. This tool inverts the present-value annuity formula (PMT) for you: plug in the principal, the expected annual rate and the payout horizon, and it returns the level payment that exactly depletes the balance to zero at the end of the term, broken into principal vs interest. Toggle between ordinary annuity (paid at period-end) and annuity-due (paid at period-start), and switch between monthly or yearly payouts to model HKMC public-annuity, life-insurance annuities or a self-managed retirement drawdown.
Please enter a valid number
Payment per period
—
Principal
—
Interest earned
—
Total received
—
Uses the textbook PMT formula assuming a constant rate. Real annuity products (HKMC Public Annuity, life-insurance annuities) layer in guarantee periods and dividends — always cross-check with the insurer's benefit illustration.
Formula
PMT = PV × r / (1 − (1 + r)^−n); for an annuity-due, PMT_due = PMT_ordinary / (1 + r). PV is the present value (principal), r is the per-period rate (annual rate ÷ periods per year), n is the total number of periods. If r = 0, PMT simplifies to PV / n.
- · Ordinary annuity: payments arrive at the end of each period — the convention for mortgages, car loans and bond coupons. The calculator defaults to this mode.
- · Annuity-due: payments arrive at the start of each period — typical for rent and most insurance premiums. The per-period amount is slightly smaller (divided by 1 + r) for the same principal.
- · "Yearly" suits public-service pensions paid as one cheque per year; "Monthly" matches HKMC Public Annuity, life-insurance annuities and most self-managed retirement drawdowns.
- · The model assumes the rate is constant for the whole horizon. Real annuity policies (HKMC Public Annuity, whole-life annuities) split into a guaranteed portion plus dividends — always reconcile against the insurer's benefit illustration.
- · Example: $1,000,000 principal, 4 % annual rate, 20-year monthly payout → about $6,060 per month, $1,454,400 received in total, of which $454,400 is interest income earned on the dwindling balance.
- · To answer the reverse question ("how much do I need to retire?"), combine this tool with the Compound Interest, Savings Goal or CAGR calculators on this site.
- · Formula sources: CFA Institute curriculum, Brealey & Myers "Principles of Corporate Finance", HKMC Public Annuity product factsheet.
Frequently asked
How is this different from a mortgage calculator — isn't it the same formula?
Mathematically they are literally the same PMT equation. In a mortgage, the principal is money you borrowed and PMT is what you pay the bank each month. In an annuity, the principal is money you already own and PMT is what the insurer or your portfolio pays you each month. Same formula, opposite direction. So "$6,060 per month for 20 years amortises $1,000,000" reads either way: borrowing it from the bank or drawing it down from your own pot.
What annual rate does the HKMC Public Annuity actually pay? How do I check it with this tool?
HKMC Public Annuity rates depend on age and gender at issue; at age 65 a male currently receives roughly HK$5,800 per month for life per HK$1 million single premium (with a guaranteed period to age 105). To sanity-check it with this tool, treat the lifetime payout as a fixed-term annuity: $1 M principal, $5,800/month for 20 years implies an implicit annual rate around 3.5–4 %; over 30 years it works out closer to 5.5–6 %. The HKMC policy is actually a whole-life payout with guarantees and a residual death benefit, so it isn't identical to a fixed-term PMT — use this calculator for order-of-magnitude comparisons.
Can I use this calculator to figure out how many years my retirement pot will last?
Yes, just iterate. Pick your target payout (say HK$20,000/month) and adjust the term up or down until the "Payment per period" matches your spending need. With $3 M principal at 4 %, 20 years pays about $18,180/month, 25 years about $15,830, 15 years about $22,180 — so a target of $20,000 lasts roughly 22 years. If you would rather start from a withdrawal-rate angle (the "4 % rule" framing), use a dedicated retirement-runway calculator: the inputs are arranged differently and you get the years out directly.
How does inflation affect the result — should I enter a nominal or real rate?
The calculator solves for a level nominal annuity — your $6,060 in year 20 is the same number on the cheque but worth far less in real purchasing power because of inflation. If you want to preserve real spending power, plug in a real rate (nominal rate minus expected inflation, e.g. nominal 4 % − 2.5 % inflation ≈ 1.5 % real). The payout then represents constant purchasing power in today's dollars, which you would top up nominally year by year. Hong Kong's iBond and other inflation-linked government bonds are real-world examples of "real-rate" annuities.
Are there tax-advantaged annuity products in Hong Kong?
Yes — Qualifying Deferred Annuity Policies (QDAP). Since April 2019 you can deduct up to HK$60,000 a year (married couples can pool up to HK$120,000) for QDAP premiums plus voluntary MPF contributions (TVC), saving up to about HK$10,200 in salaries tax depending on your marginal rate. Typical QDAP internal rates land in the 3–4 % range, which is a reasonable input here for a sanity-check, but the binding numbers are always in the insurer's benefit illustration since part of the payout is non-guaranteed.
Related tools
Mortgage Monthly Payment Calculator
Enter property price, down payment, term and rate — get monthly payment, total interest and total payable.
Hong Kong Stamp Duty Calculator
Compute Ad Valorem Stamp Duty (AVD) on residential property at the latest rates.
Hong Kong Salaries Tax Calculator
Estimate Hong Kong salaries tax using both the progressive bands and the 15% / 16% two-tier standard rate (Year of Assessment 2024/25).
Hong Kong MPF Contribution Calculator
Hong Kong MPF contributions for employees, employers and self-employed persons using the statutory 5% rate with the $7,100 minimum and $30,000 maximum relevant income thresholds.
Compound Interest Calculator
Project the future value of a principal plus regular monthly or yearly contributions at a given annual rate, with total interest earned.
CAGR (Compound Annual Growth Rate) Calculator
Compute the compound annual growth rate from a start value, end value and number of years — useful for comparing long-term growth.
ROI (Return on Investment) Calculator
Compute total profit, ROI % and annualised return from initial cost, final value and holding period — useful for comparing investments.
Inflation / Purchasing Power Calculator
Project the future purchasing power of an amount given an annual inflation rate and time horizon — and the nominal amount needed to keep up.
Markup & Margin Calculator
Convert between cost, selling price, markup % and gross margin % — handy for retail pricing and SMB profit analysis.
Break-Even Point Calculator
From fixed costs, variable cost per unit and selling price, find the units needed to cover all costs — plus break-even revenue, contribution margin, target-profit volume and margin of safety.
APR ↔ APY Calculator (Nominal vs Effective Annual Rate)
Convert a nominal annual rate (APR) at any compounding frequency to the effective annual yield (APY), or solve the inverse — essential for comparing credit-card, savings-account and mortgage rates.
Rule of 72 Calculator (Doubling Time)
Quickly estimate how many years to double your money at a given compound rate, or what rate is needed to double in a target period — with the exact logarithmic answer alongside.
Loan Payoff Time Calculator
From balance, monthly payment and APR, compute how many months until the loan is paid off, the total interest paid, and the minimum payment that just covers interest.
Savings Goal Calculator
Given goal amount, current savings, monthly deposit and APR, see how many months it takes to hit the target.
Net-to-Gross Salary Calculator (Hong Kong)
Enter the after-tax salary you want to take home and the calculator works back to the gross figure you need to offer (HK MPF and salaries-tax aware).
Rental Yield Calculator
Enter property price, monthly rent and yearly expenses (rates, management, insurance, vacancy) to see both gross and net rental yield (%).
Dividend Yield Calculator
Enter annual dividend per share, share price, EPS and amount invested to compute dividend yield (%), payout ratio (%) and projected yearly income.
Sales Tax / VAT Calculator
Enter a price and a tax rate to compute the gross total and tax amount, or work backwards from a tax-inclusive price to the net amount.
Hong Kong Loan-to-Value (LTV) Ratio Calculator
Enter property value and loan amount to get the LTV ratio, the required down-payment, and a live check against HKMA caps and the HKMC mortgage insurance ceilings.
Present Value (PV) Calculator
Discount a future amount back to today using an annual rate, horizon and compounding frequency — get the present value, discount factor and effective annual rate.
Real Interest Rate (Fisher Equation) Calculator
Use the Fisher equation to strip inflation from a nominal rate and find the real return, with the common r ≈ i − π approximation alongside.
Safe Withdrawal Rate (4% Rule) Calculator
Apply the Trinity Study 4% rule: enter your retirement nest egg and a withdrawal rate to see the annual and monthly income it can support.