Annuity Payouts: How Much Can You Get Each Month?
Annuity payouts can provide guaranteed income in retirement, but how much? The answer depends on several factors, including age, gender and the amount invested.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
Annuities can provide you with guaranteed income in retirement, but the amount of annuity payouts you receive each month depends on several factors. For example, your age, gender, amount invested, interest rate, life expectancy, and the type of annuity you choose will all determine how much income you can expect.
For retirees seeking a steady stream of income, an "immediate annuity" is a popular choice. This type of annuity converts the amount you invest (usually a lump sum at the start of the annuity) into regular payments over a set period or for your lifetime. Immediate annuities may be fixed or variable interest.
You can invest as much as you want in an annuity, but balances tend to range from $200,000 to $1 million, according to Ken Nuss, founder and CEO of AnnuityAdvantage. That doesn’t mean you can’t purchase an annuity with $50,000 or $100,000. It's up to you.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
How do interest rates affect annuity payouts?
The interest rate set by the Federal Reserve is a key factor in how much your annuity will pay you each month. The higher the interest rate, the more money you get.
“What ultimately impacts the payout is the expected return the insurance company gets on the premium,” says Stephen Kates, formerly a principal financial analyst at Annuity.org. “The higher the rates are, the better.” Beyond interest rate, here are the factors that impact your annuity payment.
Amount deposited: The more you deposit in the annuity, the more of a payout you’ll receive.
Age: The older you are when purchasing an annuity, the higher the payment. The insurance company doesn’t expect you to live as long as someone who purchases an annuity at a younger age, thus the higher payment.
Gender: Since women tend to live longer than men, the payment is typically smaller for females than males. At last check, the life expectancy for males and females in the U.S. is 74.8 years and 80.2 years, respectively.
Premium amount: A higher initial premium will yield a higher monthly payment. Once you purchase an annuity, however, you cannot access the money without facing potential penalties and fees.
Payout choice: With an immediate annuity, you can have it pay you until your death, which is known as a "single-life payout." Or, you may have it continue to pay a survivor or beneficiary, known as a "joint" or "survivor payout." Your monthly annuity payout will be lower than with a single-life payout option in that type of annuity.
Period of payouts: If you choose to guarantee payments for your lifetime, your payout will be smaller than if you selected a ten-year term. Many retirees select a lifetime payout to guarantee income for the long haul.
What are immediate annuities?
Immediate annuities can be fixed, variable or indexed. With a fixed immediate annuity the interest rate is fixed when the contract is signed, which gives you that protection from fluctuations in the markets. With a variable annuity, payments fluctuate based on the performance of the underlying investment.
An indexed annuity payout is linked to the performance of a specific market index. A fixed immediate annuity typically has the smallest return but it is the safest and most consistent. You know what you are getting paid. There are no surprises.
How much does a $100,000 annuity pay per month?
Before you purchase an immediate annuity, you probably want to know how much income it will give you each month. That will help you determine how much money you want to annuitize and how it will impact your monthly budget.
While all of the factors discussed above impact the annuity payout, you can get a general idea of how much your annuity payout will be monthly below.
We’ve based the payouts on a fixed immediate, life-only annuity for a 65-year-old buyer. Data is provided by Annuity.org.
Immediate annuity amount: $50,000
Buyer age: 65
Buyer sex: Female
Payout: $300
Immediate annuity amount: $50,000
Buyer age: 65
Buyer sex: Male
Payout: $314
Immediate annuity amount: $100,00
Buyer age: 65
Buyer sex: Female
Payout: $599
Immediate annuity amount: $100,00
Buyer age: 65
Buyer sex: Male
Payout: $629
Immediate annuity amount: $200,00
Buyer age: 65
Buyer sex: Female
Payout: $1,199
Immediate annuity amount: $200,00
Buyer age: 65
Buyer sex: Male
Payout: $1,258
Immediate annuity amount: $250,000
Buyer age: 65
Buyer sex: Female
Payout: $1,498
Immediate annuity amount: $250,000
Buyer age: 65
Buyer sex: Male
Payout: $1,572
Immediate annuity amount: $300,000
Buyer age: 65
Buyer sex: Female
Payout: $1,798
Immediate annuity amount: $300,000
Buyers age: 65
Buyers sex: Male
Payout: $1,886
Immediate annuity amount: $500,000
Buyer age: 65
Buyer sex: Female
Payout: $2,997
Immediate annuity amount: $500,000
Buyer age: 65
Buyer sex: Male
Payout: $3,144
Immediate annuity amount: $750,000
Buyer age: 65
Buyer sex: Female
Payout: $4,495
Immediate annuity amount: $750,000
Buyer age: 65
Buyer sex: Male
Payout: $4,716
Immediate annuity amount: $1 million
Buyer age: 65
Buyer sex: Female
Payout: $5,993
Immediate annuity amount: $1 million
Buyer age: 65
Buyer sex: Male
Payout: $6,288
What are joint annuities?
For married couples a joint annuity is another popular choice. With a joint annuity two people, usually spouses, are named as annuitants and have the right to receive payments.
Joint annuities are designed with retired couples in mind who want guaranteed monthly income that continues after either one of the spouses is alive. Payments tend to be lower but they also tend to last longer.
A joint annuity provides a steady stream of monthly income and peace of mind knowing when you pass your spouse can still revieve the income. It also prevents the spouses from outliving their income in retirement, a real fear for many retirees.
How much does a $100,000 joint annuity pay per month?
With a joint annuity, the monthly payout is going to be smaller. Here’s a look at how much. We’ve based the payouts on a fixed immediate, life-only annuity, with both buyers aged 65. Data is provided by Annuity.org.
Joint annuity amount: $50,000
Buyers' age: 65
Payout: $280
Joint annuity amount: $100,00
Buyers' age: 65
Payout: $561
Joint annuity amount: $200,00
Buyers' age: 65
Payout: $1,122
Joint annuity amount: $250,000
Buyers' age: 65
Payout: $1,403
Joint annuity amount: $300,000
Buyers' age: 65
Payout: $1,684
Immediate annuity amount: $750,000
Buyers' age: 65
Payout: $4,212
Knowledge is power
Annuities are a way to guarantee income for your lifetime, but many factors impact how much of an annuity payout you’ll receive.
Knowing how much you can get each month based on different contract sizes can help you plan your cash flow when you do decide to retire.
Related content
-
Ask the Tax Editor: Federal Income Tax DeductionsAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on federal income tax deductions
-
States With No-Fault Car Insurance Laws (and How No-Fault Car Insurance Works)A breakdown of the confusing rules around no-fault car insurance in every state where it exists.
-
7 Frugal Habits to Keep Even When You're RichSome frugal habits are worth it, no matter what tax bracket you're in.
-
Why Picking a Retirement Age Feels Impossible (and How to Finally Decide)Struggling with picking a date? Experts explain how to get out of your head and retire on your own terms.
-
For the 2% Club, the Guardrails Approach and the 4% Rule Do Not Work: Here's What Works InsteadFor retirees with a pension, traditional withdrawal rules could be too restrictive. You need a tailored income plan that is much more flexible and realistic.
-
Retiring Next Year? Now Is the Time to Start Designing What Your Retirement Will Look LikeThis is when you should be shifting your focus from growing your portfolio to designing an income and tax strategy that aligns your resources with your purpose.
-
I'm a Financial Planner: This Layered Approach for Your Retirement Money Can Help Lower Your StressTo be confident about retirement, consider building a safety net by dividing assets into distinct layers and establishing a regular review process. Here's how.
-
Your Adult Kids Are Doing Fine. Is It Time To Spend Some of Their Inheritance?If your kids are successful, do they need an inheritance? Ask yourself these four questions before passing down another dollar.
-
The 4 Estate Planning Documents Every High-Net-Worth Family Needs (Not Just a Will)The key to successful estate planning for HNW families isn't just drafting these four documents, but ensuring they're current and immediately accessible.
-
Love and Legacy: What Couples Rarely Talk About (But Should)Couples who talk openly about finances, including estate planning, are more likely to head into retirement joyfully. How can you get the conversation going?
-
We're 62 With $1.4 Million. I Want to Sell Our Beach House to Retire Now, But My Wife Wants to Keep It and Work Until 70.I want to sell the $610K vacation home and retire now, but my wife envisions a beach retirement in 8 years. We asked financial advisers to weigh in.
