Annuity Payout Calculator

The annuity payout calculator shows your monthly income from any lump sum — a $500,000 annuity pays roughly $2,800–$3,200/month for a 65-year-old in 2026, depending on the insurer and payout structure. Enter your premium, age, and payout option (life only, period certain, or joint life) to see your exact monthly income and total lifetime payout. Annuities are insurance products that convert a lump sum into a guaranteed income stream — functioning as a personal pension that you purchase from an insurance company.

The U.S. annuity market exceeded $385 billion in 2023 sales, the highest on record, as retirees sought guaranteed income amid equity market volatility and improved insurance company crediting rates following the Federal Reserve's rate increases. Understanding exactly what payout you can expect — and how insurance companies calculate it — is essential before committing what is often a one-time, irrevocable premium.

Two primary annuity types drive most payout decisions:

• Immediate Annuity (SPIA — Single Premium Immediate Annuity): You pay a lump sum today and income begins within 30 days to 12 months. Payouts are determined at purchase and do not change (unless you select an inflation rider). Ideal for retirees who want to immediately convert savings into guaranteed income. Example: $300,000 premium at age 70 might produce $1,750–$2,000/month for life.
• Deferred Income Annuity (DIA/Longevity Annuity): You pay a premium today but delay income to a future date — often age 80 or 85. The longer the deferral, the higher the monthly payment when income begins, because the insurance company has use of your money for more years and fewer annuitants survive to the payment date. A $100,000 DIA purchased at 65 for income beginning at 80 can produce $1,400–$1,800/month.

The calculator also covers variable annuities (where payouts fluctuate with investment performance) and fixed indexed annuities (where growth is tied to a market index with a floor), though immediate and deferred income annuities are the most commonly modeled for retirement income planning.

Per the SEC's investor guidance on annuities and FINRA's annuity education resources, annuities carry unique considerations including surrender charges, mortality and expense fees, and the financial strength of the issuing insurer. Always verify the issuer's AM Best rating (A or higher is recommended) before purchasing.

Insurance companies calculate annuity payouts using actuarial present value mathematics. The core formula for a life annuity payment is derived from the present value of a series of expected payments, weighted by survival probabilities and discounted at an internal rate.

Immediate Annuity (Period-Certain) Monthly Payment:

Life Annuity Adjustment (Actuarial Factor):

Deferred Income Annuity Payout:

These calculations explain why deferred annuities produce dramatically higher monthly payouts than immediate annuities for the same premium — the insurance company compounds the premium for the deferral period and benefits from mortality credits (some purchasers do not survive to the payout date, and their forfeited premiums subsidize survivors' higher payouts).

Follow these steps to estimate your annuity income and compare payout structures before purchasing.

1. Choose your annuity type. Select "Immediate (SPIA)" if you want income to begin within the next 12 months. Select "Deferred Income Annuity (DIA)" if you want income to begin at a future date (often 10–20 years away). DIAs produce far higher monthly payouts per premium dollar because of the compounding and mortality credits during the deferral period. For most retirees converting a lump sum to immediate income, the SPIA is the relevant tool.
2. Enter your premium amount. This is the lump sum you will pay to the insurance company. Most SPIAs require a minimum of $10,000–$25,000; many retirees use $100,000–$500,000 or rollover funds from an IRA or 401(k). Example: $250,000 from a traditional IRA rollover.
3. Enter your age (and spouse's age for joint annuities). Age at annuity purchase is the most important variable. A 65-year-old and a 75-year-old buying identical SPIAs for the same premium will receive very different monthly payments — the 75-year-old receives more because their expected payout period is shorter. For joint life annuities, enter both ages.
4. Choose your payout structure:
   • Life Only: Highest monthly payment; income stops at death with no survivor benefit. Best for single retirees or those with other assets for heirs.
   • Life with Period Certain (10 or 20 years): Income continues for at least 10/20 years even if you die earlier. Slightly lower monthly payment than life only.
   • Joint and Survivor (100% to survivor): Income continues as long as either spouse is alive. Significantly lower monthly payment (15–25% less) but provides complete survivor protection.
   • Joint and Survivor (50% or 66.67%): Income reduces by 33–50% at the first spouse's death. Moderate payment reduction from life only.
5. Select an interest/crediting rate. The calculator uses current market annuity rates. In mid-2025, SPIA payout rates are driven by 10-year Treasury yields plus a spread. A reasonable estimate is 5–5.5% for the implicit discount rate in most insurance quotes. Always obtain actual quotes from multiple insurers via immediateannuities.com or a fee-only advisor to compare real-market payouts.
6. Add an inflation rider if desired. A 3% annual COLA rider will reduce the initial monthly payment by approximately 25–30% but protects purchasing power over a 20–30 year retirement. At 3% annual increases, the initially lower payment surpasses the flat payment in roughly year 11 and significantly exceeds it by year 20.
7. Review the breakeven analysis. The calculator shows the breakeven age — how long you must live to collect more in total payments than your initial premium. For a 70-year-old male with a life-only SPIA, the breakeven is typically age 82–84. Living beyond the breakeven makes the annuity financially superior to self-managing that lump sum in bonds. Check your own odds of living past the breakeven age in the SSA actuarial life table; for many buyers it is close to a coin flip whether the annuity "wins" on a pure financial basis — plus 100% certainty against outliving the income.

Your annuity payout calculation reveals several dimensions of value and risk that inform whether an annuity is appropriate for your situation.

Monthly Payout Amount: The headline figure. For a 70-year-old investing $300,000 in a life-only SPIA in mid-2025, a typical market payout is approximately $1,850–$2,050/month — an implicit yield of 7.4–8.2% annually on the premium. This yield appears to exceed available bond yields because it includes a mortality credit: the insurance company is paying you the returns that annuitants who die early effectively contribute to the pool. The longer you live, the larger this subsidy.

Total Lifetime Payments: If a $300,000 SPIA at age 70 produces $1,950/month, and you live to 87 (17 years), you collect $1,950 × 204 months = $397,800 — $97,800 more than your premium in nominal terms. Adjusted for the time value of money, the internal rate of return is roughly 3–4% in real terms for average life expectancies, which competes reasonably with long-term bonds.

Breakeven Analysis: The calculator computes the exact age at which your cumulative payments equal your initial premium. For most 65–70-year-old buyers, this is approximately age 80–83 for single life, and 82–85 for joint life. The value proposition of an annuity is not primarily about "winning" the breakeven — it is about the insurance value against longevity risk. Even if you die at the breakeven, you received a fair return and protected against the scenario where you live to 95 with no guaranteed income.

Opportunity Cost Comparison: A useful reality check: what would $300,000 produce if invested in a 60/40 portfolio at a 4% withdrawal rate? Answer: $12,000/year = $1,000/month. The SPIA's $1,950/month is nearly double — but the investment portfolio retains residual value for heirs. The annuity has no residual value at death (unless a period certain or refund feature was purchased). The right choice depends on your health, family situation, other assets, and tolerance for the risk of portfolio depletion.

Tax Treatment: Annuity payouts from non-qualified (after-tax) premiums are partially taxable. The exclusion ratio determines what portion of each payment is return of premium (tax-free) vs. earnings (taxable). Example: $300,000 premium, $630,000 expected total lifetime payments → exclusion ratio = 300,000 / 630,000 = 47.6%. Of each $1,950 monthly payment, $928 is tax-free and $1,022 is ordinary income. Annuities funded with pre-tax IRA money are 100% taxable upon distribution, per IRS Publication 575.

• Ladder annuity purchases rather than buying all at once. Instead of committing $400,000 to a single SPIA at 65, purchase $100,000 SPIAs every five years — at 65, 70, 75, and 80. Each tranche benefits from your older age (higher payout rate) and potentially higher interest rates. The annuity income ladder strategy produces more total income over most lifetimes than a single lump purchase, and reduces the risk of committing all your money at a period of low annuity rates.
• Use a deferred income annuity as longevity insurance, not a primary income source. Purchase a $100,000 DIA at age 65 with income starting at age 82. The payout — potentially $2,000–$2,500/month — ensures you never run out of income in your 80s, even if your portfolio is depleted. This frees you to spend your portfolio more aggressively in your 60s and 70s (potentially at a 5–5.5% withdrawal rate) because you have a guaranteed income backstop beginning at 82. The QLAC version of a DIA allows up to $200,000 of IRA funds to be excluded from RMDs.
• Shop across at least 5 insurers — payouts vary by 10–15% for identical contracts. Insurance companies quote annuity rates independently, and spreads are significant. On a $300,000 SPIA, a 10% difference in monthly payout = $195/month = $2,340/year = $35,000+ over 15 years. Use an independent annuity marketplace or a fee-only financial advisor who can access the full market rather than a captive agent who represents a single company. Verify the insurer's AM Best financial strength rating (A or A+ recommended).
• Choose joint-and-survivor for married couples unless you have other survivor income. Life-only annuities save 15–25% in monthly payment but leave a surviving spouse with no income from that annuity. If your spouse's Social Security would be significantly reduced after your death, the survivor protection of a joint annuity is essential. Model both scenarios and compare the cost of protection against the value of the survivor benefit.
• Consider an inflation-adjusted SPIA if you're purchasing in your early 60s. A flat SPIA purchased at 65 loses purchasing power every year. At 3% inflation, the real value of a fixed $1,950/month payment falls to $1,061/month by age 85. A 3% COLA rider costs approximately 25–30% of the initial payment (you'd start at $1,365/month instead of $1,950) but by year 11 the COLA payment surpasses the flat payment and continues growing. For healthy retirees with family longevity histories, inflation riders are worth their cost.

An annuity payout converts a lump sum into a stream of payments. For a fixed-period annuity, the payment comes from the standard annuity formula:

For a lifetime annuity, the insurer replaces "n" with actuarial life expectancy and prices in mortality credits — which is why lifetime payout rates quoted by insurers (often 6–7%+ at age 70) exceed what any safe withdrawal strategy can match: part of each check is return of principal, and those who die early subsidize those who live long. Run your lump sum, rate, and term in the calculator above to see the exact monthly figure, and compare a fixed-term payout against insurer lifetime quotes before committing.

The same $500,000 premium produces very different checks depending on the guarantee you choose (illustrative rates for a 65-year-old):

Every added guarantee lowers the monthly check. The right choice depends on spousal needs, other guaranteed income (Social Security, pension), and legacy goals. A common planning approach: annuitize only enough to cover essential expenses, keep the rest invested for growth and flexibility.

The monthly payout on a $100,000 annuity depends on the payout period and the interest rate credited. Using the annuity payment formula at a 5% annual rate:

A lifetime income annuity works differently — the insurer prices in life expectancy, so payouts rise with your age at purchase: a 65-year-old typically receives meaningfully more per month than a 55-year-old for the same premium, and quotes vary by insurer and prevailing rates. Two rules of thumb when comparing quotes: (1) the advertised "payout rate" is not an interest rate — it includes return of your own principal; (2) adding riders like joint-life coverage or inflation adjustment typically reduces the starting payment 20–35%. Run your own premium, rate, and period through the calculator above, then compare against live quotes — if an insurer's fixed-period payout is far above the formula result, read the fine print.

Suppose you convert $500,000 into an immediate fixed annuity paying out over 25 years at a 5% internal rate:

Shorter terms mean bigger checks but more longevity risk — outliving the payments. Lifetime annuities remove that risk in exchange for a lower payout and typically nothing left for heirs unless you add a period-certain rider (which lowers the check further). Before committing, compare the annuity's implied return against simply drawing down a portfolio with the Safe Withdrawal Rate Calculator — at today's rates the gap is often smaller than the sales pitch suggests.

The question everyone actually types into a search bar is "how much does a $200,000 (or $500,000, or $1 million) annuity pay per month?" — so here is the full grid. These are fixed-period payouts at a 5% internal rate, computed with the standard annuity payment formula (PMT = PV × r ÷ (1 − (1 + r)⁻ⁿ), monthly compounding):

Payouts scale exactly linearly with the premium — a $200,000 annuity pays precisely double a $100,000 one on the same terms — so you can interpolate any amount. Term length is the real lever:

Real-world quotes differ from this idealized grid in three ways: the insurer's rate (which tracks Treasury and corporate bond yields, so quotes rise and fall with the rate environment), mortality credits on lifetime annuities (pooling with other annuitants lets insurers pay more than a fixed term would suggest, especially at older ages), and riders — inflation adjustments, period-certain guarantees, and joint-life coverage all reduce the starting check. FINRA's annuities investor guide and the SEC's Investor.gov annuity overview cover the product mechanics and fee structures to scrutinize before signing. Run your own premium, rate, and term in the calculator above — then compare the result against a straightforward portfolio drawdown with the safe withdrawal rate calculator and the How Long Will My Money Last calculator. An annuity is essentially buying insurance against outliving your money; the price of that insurance is the gap between the two answers.

The core retirement income decision is whether to annuitize a portion of your savings or rely entirely on portfolio withdrawals. The Safe Withdrawal Rate (SWR) calculator models how long a portfolio lasts at different withdrawal rates — the 4% rule suggests a balanced portfolio can sustain 30 years of withdrawals with high historical success rates. An annuity trades potential upside for certainty: you give up portfolio growth in exchange for a guaranteed check that continues no matter how long you live or how markets perform. Most financial planners suggest a hybrid: annuitize 25–40% of assets for baseline income security, keep the rest invested for growth and flexibility.

Immediate annuity payouts scale linearly with the premium, so a useful shortcut is to think per $100,000: at age 65 a single-life contract pays roughly $610–$655 per month for every $100,000 annuitised, with women at the lower end because they live longer on average. We publish full payout tables — by age, sex and payout option — for the amounts people search for most:

• $100,000 annuity — about $655/month at 65 (male, life only)
• $250,000 annuity — about $1,637/month
• $300,000 annuity — about $1,965/month
• $500,000 annuity — about $3,274/month
• $1,000,000 annuity — about $6,548/month

The full index of premiums, plus a per-$100,000 reference table, is on the annuity payout tables hub.

Most annuity calculators either amortise a lump sum over a fixed term — which is not what a lifetime annuity does — or show a quote table with no visible method. This one computes an annuity-due factor: the present value of $1 paid at the start of every month for as long as the contract pays. Monthly income is simply your premium divided by that factor.

Survival probabilities come from the SSA Office of the Chief Actuary period life table (2019, as used in the 2021 Trustees Report), converted from annual to monthly death probabilities.

One adjustment is applied that most published figures never disclose: people who buy annuities live longer than the general population, because healthy people are the ones who choose to buy longevity insurance. Insurers price off annuitant mortality tables rather than population tables, so we scale the SSA death probabilities down, calibrated so the age-65 output matches published 2026 market quotes. Using the raw SSA table would overstate every payout on this page.

These are actuarial estimates, not insurance quotes. We are not an insurance broker and earn nothing from annuity sales. Real pricing varies by carrier, state, health and issue date — always compare live quotes from several insurers before buying.

Results are illustrative estimates, not insurer quotes.