The future value of an annuity is FV = P × [(1 + r)^n − 1] ÷ r, where P is each deposit, r is the rate per period and n is the number of deposits. Starting with $10,000 and adding $200 a month at 7% for 20 years grows to about $144,573, of which $58,000 is your own money. If each deposit is made at the start of the month (annuity due), the total is about $145,180.
This annuity calculator projects future value from a starting amount, a monthly contribution, an annual return rate, and years. It compounds monthly. Defaults of $10,000 start, $200 per month, 7 percent, and 20 years project about $144,573.
Use it while you are still funding an annuity style savings stream. When you need income from a lump sum already saved, switch to the annuity payout calculator. For yearly IRA contributions, use the IRA calculator or the Roth IRA calculator.
How the formula works
Monthly rate r equals annual percent divided by 100 divided by 12. Number of months n equals years × 12. Future value combines grown principal with the future value of an ordinary monthly annuity of contributions.
Worked example
Principal $10,000, monthly contribution $200, rate 7 percent, years 20. Projected future value ≈ $144,573.
| Input | Value |
|---|---|
| Starting amount | $10,000 |
| Monthly contribution | $200 |
| Annual return | 7% |
| Years | 20 |
| Future value | ~$144,573 |
Ordinary annuity vs annuity due
| Timing | When deposits are made | $10,000 + $200/month, 7%, 20 years |
|---|---|---|
| Ordinary annuity | End of each month | $144,572.72 |
| Annuity due | Start of each month | $145,180.47 |
Annuity due = ordinary annuity deposits × (1 + monthly rate). This calculator uses end-of-month deposits.
Growth of $200 a month
| Annual rate | 10 years | 20 years | 30 years |
|---|---|---|---|
| 5% | $31,056 | $82,207 | $166,452 |
| 7% | $34,617 | $104,185 | $243,994 |
| 9% | $38,703 | $133,577 | $366,149 |
Monthly compounding, end-of-month deposits, no starting balance. Total deposited: $24,000 (10 years), $48,000 (20 years), $72,000 (30 years). Rates are illustrations, not expected returns.
How to use the fields
- Starting amount is cash already in the plan.
- Monthly contribution is the recurring deposit.
- Annual return is the assumed yearly percentage rate.
- Years sets how long deposits and growth continue.
Annuity Payment vs Annuity Payout
An annuity payment is the regular amount paid in or out. This page calculates the accumulation side: what your deposits grow to. To calculate an annuity payment from a lump sum, meaning the monthly income a balance can pay out, use the annuity payout calculator. The formula is payment = balance × r ÷ (1 − (1 + r)^−n), where r is the monthly rate and n is the number of months.
| Lump sum | 5%, 20 years | 5%, 10 years | 4%, 20 years | 6%, 20 years |
|---|---|---|---|---|
| $100,000 | $659.96 | $1,060.66 | $605.98 | $716.43 |
| $200,000 | $1,319.91 | $2,121.31 | $1,211.96 | $1,432.86 |
Monthly payments, level, before tax and fees. Going the other way, reaching $100,000 in 20 years at 7% takes about $191.97 a month. This calculator does not solve for the deposit, so try different monthly amounts until the result reaches your target.
Common mistakes
- Typing an annual contribution into the monthly field
- Comparing this result to an annual compounding IRA without adjusting deposit timing
- Ignoring fees in the chosen rate
- Assuming markets deliver a flat 7 percent every year
Keeping the plan on track
- Confirm the monthly deposit fits your cash flow, and set it to leave your account automatically after payday so you do not skip months.
- Run a lower rate scenario for caution, and lower the rate input for a rough real-return view since this tool has no inflation field.
- Note whether the starting principal is taxable or tax deferred in real life.
- Recalculate after raises or contribution pauses, and review the deposit size quarterly.
Why monthly compounding changes the path
Compared with an annual-deposit retirement tool, this page applies deposits every month and compounds monthly. Converting $200 a month into $2,400 a year and pasting it into an annual tool will not give the identical ending number.
Stress testing the $144,573 case
Rerun with a lower rate, such as 5 percent, to see how sensitive the ending value is to return assumptions. Rerun with $150 monthly if cash flow is tight. At 5%, the same plan reaches about $109,333. At 7% with $150 a month, it reaches about $118,526. Those alternate cases often change decisions more than arguing about a single headline rate.
If you expect to raise deposits later, model a conservative current monthly deposit now and a higher monthly deposit in a second scenario rather than blending into one fuzzy number.
Fees, riders, and product complexity
Insurance annuity contracts can include fees, surrender schedules, and optional riders that this future value formula does not encode. Treat the calculator as clean math on four inputs. Read contract disclosures for anything you might buy.
Annuity contracts sold by insurers can carry surrender charges if you withdraw early, and earnings grow tax-deferred but are taxed when you withdraw them. Withdrawals before age 59½ may also face a 10% IRS tax penalty. Read the contract and see the SEC’s investor guide to annuities.
If you are simply using annuity language for a personal monthly savings habit in a brokerage account, the same future value math still helps you visualize outcomes.
Next step into income planning
When the accumulation phase ends and you care about monthly checks from a lump sum, move to the annuity payout calculator with the saved present value, a rate, and payout years. Keeping accumulation and payout on separate pages avoids mixing contribution fields with payment fields.
Already have the balance? See what it pays with the annuity payout calculator.
Limitations
The estimate does not include insurance riders, surrender charges, or inflation. It is educational future value math on four inputs.