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US annuity vs drawdown calculator

US annuity vs systematic withdrawal calculator: SPIA vs 401(k) / IRA

Compare a US Fixed Immediate Annuity (SPIA) with systematic 401(k) / IRA distributions: evaluate income predictability, sequence of returns risk, and portfolio legacy.

US editionHow it worksAuthor:

Muhammed SubhanFinance expertMuhammed Subhan is a finance expert who reviews the finance, tax, accounting and general-purpose calculators on Calculators Site, checking that the formulas and explanations are accurate and clearly explained before they go live.Full profile LinkedIn

YOUR RESULT

Guaranteed annuity annual income$10,200.00

Drawdown initial annual income$7,500.00

Total annuity income paid over period$204,000.00

Total drawdown income received over period$150,000.00

Remaining drawdown pot (for heirs / future)$126,450.00

Remaining annuity capital$0.00

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Fixed annuity vs invested portfolio distributions

A Single Premium Immediate Annuity (SPIA) provides institutional risk-pooling (mortality credits), generating higher guaranteed lifetime payments than conservative bond portfolios.

Systematic withdrawals from a 401(k) or IRA maintain liquidity for medical emergencies and leave capital for heirs, but expose the retiree to severe market drawdowns.

Worked example: US annuity vs 401(k) withdrawal

A $200,000 retirement portfolio in an SPIA at 6.8% provides $13,600 annual income ($272,000 over 20 years). In drawdown, withdrawing $10,000 annually at 5.5% growth and 0.75% fees yields $200,000 in income while leaving an estimated $190,000 portfolio balance.

Inputs for the us annuity versus drawdown calculator

Portfolio & Payout Rates

Enter your retirement portfolio balance and compare SPIA quotes against 4% to 5% systematic withdrawal rates.

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