How Much Does a $500,000 Annuity Pay Per Month?

How Much Does a $500,00 Annuity Pay Per Month? Wooden Blocks with financial planning icons on them

How Much Does a $500,000 Annuity Pay You Per Month?

A $500,000 annuity would pay you $2,396 per month if you bought it at 65 and began taking your payments immediately.

The same $500,000 annuity would pay $2,269 per month for a 65 year old couple that begin joint lifetime income payments immediately. That simply means the payments would continue until the death of the second spouse.

How Much Does a $500,000 Annuity Pay Per Month?

Using the most comprehensive annuity calculator available I ran annuity quotes to determine what a $500,000 annuity would pay immediately for all ages 55-70. 

I’ve compiled the results in the table below showing both the monthly and annual income paid from a $500,000 annuity.

So for instance, at age 55 a $500,000 annuity would pay $1,825 per month or $21,900 annually with payments beginning immediately. If you are 70 a $500,000 annuity would pay you $2,605 per month beginning immediately.

$500,000 Annuity Payout Table

Age PurchasedMonthly IncomeAnnual Income
55$1,825.00 $21,900.00
56$1,860.00 $22,320.00
57$1,905.00 $22,860.00
58$1,940.00 $23,280.00
59$1,985.00 $23,820.00
60$2,190.00 $26,280.00
61$2,190.00 $26,280.00
62$2,190.00 $26,280.00
63$2,210.00 $26,520.00
64$2,250.00 $27,000.00
65$2,396.00 $28,752.00
66$2,396.00 $28,752.00
67$2,396.00 $28,752.00
68$2,415.00 $28,980.00
69$2,460.00 $29,520.00
70$2,605.00 $31,260.00

Annuity Quote

You can use one of our 20 different annuity calculators to generate an annuity quote specific to your goals and objectives.

You can also complete the form to receive an annuity quote report; we will respond within 4 business hours. Or, for more immediate assistance you may contact us at (855) 583-1104.

Are Annuities a Good Investment?

Annuities are a good investment for retirement in today’s low interest rate environment, but no single investment is right for everyone. As a general practice at My Annuity Store, our first step in retirement income planning is to complete a basic retirement income planning worksheet with our clients.

If we determine their is an income gap between guaranteed income from other sources (Social Security/ Pension) and necessary retirement expenses we often purchase an income annuity with monthly payments sufficient to fill the cap.

We very rarely recommend allocating more that 50% of your liquid net worth to an annuity as annuities come with a surrender charge for excess withdrawals during the surrender charge period. 

Income Rider vs Annuitization

Annuities are the only financial vehicle that can guarantee an income stream you can not out live.  However, we’ve found that most of our clients think of annuitization when they think of lifetime income payments.

All of the income payments referenced in this guide are generated using a fixed index annuity with an income rider. Indexed annuities provide more flexibility than annuitization because you don’t give up control of your asset.

If there are still funds in your account at your death they are paid directly to your beneficiary as a lump sum death benefit. Additionally, you do have access to your account value even while you are taking lifetime income payments. These types of withdrawals need to be avoided as your lifetime income payments will be reduced pro rata in the event you take a withdrawal above your guaranteed payment amount.

This means if you take an extra 10% out of your account value your monthly payment will be reduced by 10% moving forward.

When is the Best Age to Purchase an Annuity?

Generally speaking the best time to purchase an income annuity is 10 years prior to beginning your annuity payments. This is because most annuity income riders have a guaranteed “roll-up” rate that is applied to your income base each year for 10 years guaranteed for 10 years.

Your lifetime annuity payments are calculated by multiplying your income base by a payout percent that is determined by your age. If you purchase the annuity 10 years before you begin taking your income payments you receive the full benefit of the income rider.

If you reference the table above you will notice that a monthly income paid by a $500,000 is the same if purchased at age 60, 61 or 62. So if you were considering purchase an annuity at 62; in this scenario the best time would be to purchase at age 60 because you would receive 2 years of additional guaranteed income.


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