Using the latest annuity calculators and quoting software I’ve researched 1017 annuity products, 302 annuity income riders from 56 of the top insurance companies to calculate exactly how much monthly income an annuity will pay.
How much does a $100,000 annuity pay per month?
The below annuity charts show how much monthly guaranteed income a fixed index annuity with an income rider would pay immediately if purchased at age 60, 65, and 70.
A $100,000 Annuity Payouts for a 60 Year Old
A $100,000 Annuity Payouts for a 65 Year Old
Immediate Income for a 70 Year Old
How Much Does a $350,000 Annuity Pay Per Month?
Below are the top three annuity products for a $350,000 deposit at age 62 with income beginning immediately at age 67 and age 72.
|Income Now||Income in Five Years||Income in Ten Years|
|AIG Assured Edge $18,900||National Western Ultra $28,008||ANICO Century Plus $39,984|
|Great American PIB $17,437||American General PP $27,891||American General PP $39,331|
|Athene Ascent Pro B $16,800||Athene Ascent Pro Bonus $26,775||National Western Ultra $38,996|
- This means you do not give up control of your asset and have more flexibility should your needs or plans change. All of the numbers provided up until this point are for a deferred fixed index annuity with an income rider, not annuitization.
How are Annuity Payouts Determined?
Your guaranteed lifetime annuity income payment is determined by the following:
Single Premium Immediate Annuity Payments
Income Payments for a $100,000 Immediate Annuity
The below table lists how much a $100,000 single premium immediate annuity pays per month for a 65-year-old male, female, and a joint payout for a 65-year-old couple with income payments beginning immediately (30 days after the contract is issued).
You’ll notice the monthly income for women is slightly less than it is for a male. This is because women have a longer life expectancy than men so the insurance company assumes they will have to pay females for longer than males.
The joint-life option guarantees the income amount for as long as either spouse is alive.
Immediate Annuity Payout Rates for a 60-Year-Old
|Annuitization Income Option at 60||Male||Female||Joint- Life|
|Life with Cash Refund||$367||$351||$338|
Immediate Annuity Payout Rates for a 65-Year-Old
|Annuitization Income Option at 65||Male||Female||Joint-Life|
|Life with Cash Refund||$401||$382||$368|
The above numbers are the highest immediate annuity payouts offered from an A+ Rated Insurance Company using the single life only payout option at the time this was written.
When you purchase an immediate annuity you are essentially converting a lump sum into a series of guaranteed income payments and give up control of the asset. Due to the current interest rate environment, annuitization typically isn’t the first choice because today’s income riders provide more income and more flexibility.
However, there are certain situations in which an immediate annuity makes sense and is a useful tool. Not an investment but a tool. Examples include:
- When attempting to “Spend-down” for Medicaid Eligibility
- As an “income bridge” to cover living expenses in order to delay Social Security to age 70
- As an income source for a certain period to convert traditional IRA to a ROTH using “bracket-bumping method.”
- For “spendthrifts”
- Wealth Transfer
- Over “charitable” parents or grandparents
Immediate Annuity Payouts
There are different income annuity payout options available to you. We’ve already mentioned a couple of the options throughout this guide; below is a comprehensive list of all the payout options offered in an income annuity.
- Life Only: payments stop at death (or later of two deaths for joint).
- Joint life only: payments stop at the latter of two deaths.
- Life with Cash Refund: optional on life only or joint-life only payout that will pay your beneficiaries the difference between the original purchase amount and the sum of all payments received upon insured’s death or death.
- Life with Period Certain: optional on life only or joint-life only payout that guarantees to make payments for at least a certain number of years. Payments will continue to beneficiaries if the insured passes away during this period of time.
- Period Certain Only: Will pay you for only a specific number of years; income is not guaranteed for life.
Not only do fixed annuities provide a guaranteed interest rate for a set period of time, but they also allow your earnings to accumulate tax-deferred.
The table below lists the best-fixed annuity rates available today by the length of the term.
|2 yrs||SILAC||B+||Secure Savings Elite 2||None||2.15%|
|3 yrs||Oceanview Life||A-||Harbourview 3||0%/ 10%||2.25%|
|4 yrs||Oceanview Life||A-||Oceanview Harbourview 4 Year Annuity||0%/ 10%||2.60%|
|5 yrs||Atlantic Coast Life||B++||Safe Haven||None||3.00%|
|6 yrs||Atlantic Coast Life||B++||Safe Haven||None||3.07%|
|7 yrs||Security Sentinel Life||B++||Personal Choice||None||3.10%|
|8 yrs||Oxford Life Insurance||A-||Multi-Select MYGA||Int. / 10%||2.80%|
|9 yrs||Liberty Bankers Life||B++||Bankers Elite 9||None||3.00%|
|10 yrs||Atlantic Coast Life||B++||Safe Haven||None||3.20%|
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Frequently Asked Questions
All annuities have the ability to be turned into a guaranteed lifetime income; however, many types of annuities are purchased only for accumulation. Income Annuities are those that are designed specifically to generate a lifetime income stream. The 3 types are:
- Immediate annuity (provides guaranteed, lifelong income starting 1-12 months after purchase)
- Deferred Immediate Annuity (DIA), or Longevity, annuity (provides guaranteed, lifelong income starting 2-40 years after purchase)
- Qualified Longevity Annuity Contract or QLAC (a longevity annuity purchased with IRA funds starting after age 72)
- Deferred annuity with a lifetime income rider
Single Premium Immediate Annuities do not charge a fee. However, there is a fee to add a guaranteed income rider to a deferred annuity. The fee comes out of your account value and does not reduce your annuity payments.
Generally speaking, the best time to purchase an annuity intended to generate lifetime income is 10 years prior to taking lifetime income payments. So if your desired retirement age is 65, you should purchase your income annuity at age 55 or shortly thereafter to maximize the benefits provided by lifetime income riders.