How Much Monthly Income Will Your Savings Generate for Life?
More than most people expect. A $200,000 deposit into a single premium immediate annuity (SPIA) can generate $1,200 to $1,600 per month for life, depending on your age, gender, and payout option. Use the calculator below to get a personalized estimate, then read on to understand what drives the number and how to use it when shopping real carrier quotes.
How to Use This Calculator
Enter your deposit amount and personal details, then click “Estimate Income.” The result is a ballpark based on mid-market payout factors for your age and gender. It is not a carrier quote, but it gives you a realistic range before you request actual illustrations.
- Premium: The lump sum you plan to deposit. Most SPIAs require $10,000 minimum; $50,000-$500,000 is the most common purchase range.
- Age and gender: Younger buyers and women receive lower monthly payments because their expected payment period is longer. A 75-year-old man will receive significantly more per month than a 65-year-old woman on the same deposit.
- Annuity type: Single life covers one person. Joint life continues payments (at a reduced percentage) to a surviving spouse after the first death.
- Guarantee period: Life only pays the most but stops at death. A 10- or 20-year period certain guarantees payments to your beneficiary if you die early, but reduces the monthly amount slightly.
- Payment frequency: Monthly is most common. Annual payments produce the highest per-period amount because the insurance company holds the money longer between disbursements.
Immediate Annuity Calculator
Estimate only
Quick ballpark estimate of lifetime income from a single-premium immediate annuity (SPIA). Actual quotes vary by carrier, rate date, and state.
Assumptions & Methodology
Baseline payout factors are annual income per $1 of premium, by age and gender, with Life Only as the base. Values are linearly interpolated between anchor ages.
Period certain adjustment: 10-year certain = ~2% reduction; 20-year certain = ~2.5% reduction applied multiplicatively to the base factor.
Joint life adjustment: 6-12% reduction depending on average age of both lives. Survivor percentage scales that reduction (100% = full reduction; 75% = 0.85x; 50% = 0.70x).
Calibration: Global adjustment you can set between -10% and +10% to reflect market conditions. This is applied after all other adjustments.
Anchor factors (annual per $1 premium):
- Male: 50=0.053, 55=0.057, 60=0.062, 62=0.065, 65=0.073, 67=0.076, 70=0.082, 72=0.087, 75=0.096, 80=0.115, 85=0.142, 90=0.180
- Female: 50=0.051, 55=0.054, 60=0.059, 62=0.062, 65=0.067, 67=0.070, 70=0.076, 72=0.081, 75=0.090, 80=0.108, 85=0.134, 90=0.170
These are mid-market approximations for educational purposes. For binding quotes, request a live illustration.
How to Read Your Results
The estimate shows income per payment period based on your inputs. Here is how to interpret it:
- The number is a floor, not a ceiling. Top carriers often beat mid-market estimates by 3-8%. The calculator gives you a conservative baseline. Real quotes from A-rated carriers are frequently higher.
- Compare on a consistent basis. If you get two carrier quotes, make sure both use the same payout option (life only vs. 10-year certain) and payment frequency. Comparing a monthly life-only quote to a quarterly 20-year certain quote is apples to oranges.
- Factor in the tax treatment. For non-qualified money (savings not from an IRA or 401k), a portion of each payment is a tax-free return of your principal. Learn how the exclusion ratio works to understand your actual after-tax income.
What Is a Single Premium Immediate Annuity (SPIA)?
A SPIA is a contract between you and an insurance company. You deposit a lump sum, and the insurer begins sending you guaranteed income payments — typically within 30 days. The payments continue for your lifetime, a fixed period, or a combination of both, depending on the payout option you choose.
Unlike a savings account or bond ladder, the income does not run out when the balance hits zero. The insurance company pools longevity risk across thousands of policyholders, which allows them to pay more per dollar than you could generate safely on your own. This is sometimes called the “mortality credit” — the actuarial benefit of pooling risk.
SPIAs are the simplest annuity structure: one deposit, one set of payments, no moving parts. There are no surrender periods after the first payment begins. The tradeoff is that the lump sum is generally irrevocable, which makes payout option selection and carrier selection important decisions.
What Drives Your Monthly Payout Amount?
Five factors determine how much income a SPIA generates from a given deposit:
Your Age at Purchase
The older you are, the higher the payment. A 75-year-old man depositing $200,000 into a life-only SPIA might receive $1,900-$2,100 per month. The same deposit from a 65-year-old man would generate $1,300-$1,500 per month. The shorter the expected payment period, the more income per dollar the carrier can offer.
Your Gender
Women statistically live longer than men, so they receive lower monthly payments for the same deposit amount. A 65-year-old woman buying a $200,000 life-only SPIA might receive $1,100-$1,300 per month vs. $1,300-$1,500 for a 65-year-old man on the same deposit. This gap narrows with age.
Prevailing Interest Rates
Insurance companies invest premium dollars primarily in investment-grade bonds. When interest rates are higher, bond yields are higher, and the insurer can offer more income per dollar deposited. SPIA payout rates move in the same direction as Treasury yields, usually with a 60-90 day lag. That is why SPIA payouts are meaningfully better today than they were in 2020-2021.
Payout Option Selected
Life only always pays the most. Adding a period certain guarantee or a joint survivor benefit reduces the monthly amount because the carrier is taking on more payment risk. The reduction is typically 3-12%, depending on the option and your age.
The Carrier
SPIA payouts vary meaningfully by carrier, often by 5-10% for identical inputs. This makes carrier comparison essential. A difference of $100/month on a $200,000 purchase adds up to $24,000 over 20 years. Working with an independent broker who can quote multiple carriers simultaneously is the most reliable way to find the top payout. Request a free multi-carrier quote to see current top offers side by side.
SPIA Payout Options Explained
Life Only
Payments continue until you die, then stop. No benefits to heirs. This option pays the most income per dollar because the carrier keeps any remaining principal at death. Best suited for people who do not need to leave money behind or who have other assets for heirs.
Life with Period Certain (10-Year or 20-Year)
Payments continue for your life, but if you die within the guarantee period, payments continue to your beneficiary for the remainder of that period. The income reduction compared to life only is modest — typically 2-5% depending on age. This is the most popular option for buyers who want downside protection without sacrificing much income.
Joint and Survivor Life
Payments continue over two lives — most commonly spouses. When the first person dies, the surviving spouse continues receiving payments at 100%, 75%, or 50% of the original amount. A 100% survivor option reduces initial income by roughly 8-15% compared to single life. A 50% survivor option reduces income by only 3-7%. This structure makes sense when both spouses depend on the income stream.
Life with Cash Refund or Installment Refund
If you die before receiving total payments equal to your original deposit, the insurance company refunds the difference to your beneficiary. This eliminates the fear of “losing” principal. The income reduction compared to life only is 3-8% depending on age. A reasonable choice for buyers who funded the SPIA with after-tax savings.
SPIA vs. Other Retirement Income Sources
| Income Source | Guaranteed for Life? | Inflation Protection? | Access to Principal? | Best For |
|---|---|---|---|---|
| SPIA | Yes | Optional rider (reduces income) | No (generally irrevocable) | Predictable income floor |
| Bond ladder | No (runs out) | TIPS bonds only | Yes | Fixed-term income with flexibility |
| 4% rule (portfolio withdrawal) | No (sequence risk) | Yes (if invested in stocks) | Yes | Growth-oriented portfolios |
| Social Security | Yes | Yes (CPI-indexed) | No | Inflation-protected base income |
SPIAs work best as part of a layered income strategy. Many retirees use a SPIA to cover fixed monthly expenses — utilities, insurance, food — then leave growth assets in a portfolio for discretionary spending and inflation protection.
Who Should Consider a SPIA?
Strong candidates include:
- Retirees or near-retirees (ages 65-80) with $100,000 or more available for a lump sum purchase
- People whose Social Security and pension income does not fully cover monthly fixed expenses
- Single retirees who want guaranteed income without managing a portfolio
- Retirees concerned about outliving their savings, particularly those with family histories of longevity
- People rolling over a maturing MYGA or CD and looking for immediate income rather than reinvesting
SPIAs are generally not the right fit for people who may need access to the principal in the near term, who have significant unmet long-term care needs, or whose estate goals require leaving a large lump sum to heirs.
Frequently Asked Questions
How much does a $100,000 immediate annuity pay per month?
A $100,000 SPIA purchased by a 65-year-old male with a life-only payout currently pays approximately $640-$720 per month. A 65-year-old female on the same deposit earns approximately $590-$660 per month. At age 70, the same male buyer receives roughly $750-$830 per month. Actual payouts depend on the carrier and prevailing interest rates at the time of purchase.
Can I lose money in a SPIA?
On a life-only SPIA, yes — if you die early, the carrier keeps any remaining principal beyond what was already paid out. On a period certain or refund option SPIA, your beneficiary receives the unpaid balance. The “risk” in a life-only SPIA is really longevity risk in reverse: the longer you live, the better the deal.
Are SPIA payments taxable?
Partially, if funded with after-tax money. The IRS uses the exclusion ratio to split each payment between a non-taxable return of principal and taxable earnings. For a 65-year-old who deposits $200,000 from savings, roughly 55-70% of each payment may be tax-free. Payments from a qualified annuity (funded with IRA or 401k money) are 100% taxable as ordinary income. See our exclusion ratio guide for a full explanation.
Can I add inflation protection to a SPIA?
Yes. Many carriers offer an inflation-adjusted SPIA where payments increase by 1-3% per year. The tradeoff: initial payments start 20-35% lower than a flat-payment SPIA and take 8-12 years to catch up. For buyers already receiving Social Security (which has CPI adjustments), a flat SPIA covering fixed expenses may be sufficient.
Is it safe to buy a SPIA?
SPIAs are backed by the financial strength of the issuing insurance company. Sticking with carriers rated A- or higher by AM Best significantly reduces insolvency risk. Every state has a guaranty association that provides coverage if an insurer fails, typically up to $250,000 per policyholder per company. Learn more about annuity safety.
How soon do payments start after I buy a SPIA?
Payments typically begin within 30 days of purchase for monthly payouts. Some carriers allow you to defer the first payment by 1-6 months if you prefer, which slightly increases the payout amount. The word “immediate” refers to income starting right away rather than years later as with a deferred annuity.
Related Resources
- Single Premium Immediate Annuity (SPIA) Guide
- Exclusion Ratio: How SPIA Income Is Taxed
- How Much Does a $200,000 Annuity Pay Per Month?
- MYGA Growth Calculator
- Get a Free SPIA Quote from Multiple Carriers
- Income Annuities: SPIA, DIA, GLWB & QLAC Explained
