How Much Does A $100,000 Annuity Pay Per Month?

Annuities can help ensure you have some sort of income when you choose to retire, but the amount you receive from your payout can differ based on several factors. First, your age matters. If you purchase an annuity at an older age, then your payment will be higher.

Other factors that go into your annuity payout amount include your gender, the amount you initially invested, interest rates, your life expectancy and the annuity type you chose.

Monthly Payouts for $100,000 Guaranteed Lifetime Annuity

The data above shows that men tend to have a higher monthly payout than women because men, on average, have shorter life expectancies than women. Additionally, joint life options give the lowest payouts because they are designed to provide income for a longer period for two lifetimes instead of one.

You’ll also see that monthly payouts increase as you get older. This is because the longer you wait to receive payments, the more time your annuity has to grow on a tax-deferred basis. If you have other sources of income, such as Social Security or part-time employment, delaying annuity payouts can be a smart retirement strategy, helping to ensure predictable, guaranteed income in your later years.

Annual Percentage* Payouts for $100,000 Guaranteed Lifetime Annuity

Today’s Best Fixed Annuity Rates by Term

Real-World Examples: Frank, Lori, Brett & Susan

To understand how different factors impact the approximate payout of a $100,000 annuity, let’s look at three different scenarios. These case studies represent hypothetical estimates and are meant to give you a general idea of how different customers might receive different payouts for the same premium amount.

The payout estimate for the first scenario was calculated using data from the Cannex, the second scenario’s estimate derives from a Charles Schwab income annuity estimator; the estimate for the third scenario comes from an online calculator for annuity payouts.

Scenario 1 – Frank

Name: Frank

Age: 65

Looking To Invest: $100,000

• Frank wants guaranteed income during retirement
• He purchases an immediate annuity to start paying out in a few months when he officially retires

Monthly Payout: $651

Frank is entering retirement with a small pension and some Social Security benefits. However, he wants additional guaranteed income that he can’t outlive. He opts for an immediate lifetime income annuity, meaning his payments start within a month of purchase. He chooses the “life only” payout option because it will provide the highest possible annual income but has no death benefit. If he passes early, the funds will not go to any heirs.

Since he is 65 years old, and the average life expectancy of U.S. males is around 75 years, the insurance company will use that horizon to spread out his payments. With no refund or guaranteed payment period, his annual income will be maximized. So, Frank’s monthly payout should be around $651, but this is only an estimation.

I had a client who initially preferred a Single Premium Immediate Annuity (SPIA) or a Deferred Income Annuity (DIA). Both options involved full annuitization and offered more income than a fixed index annuity with an attached income rider. Initially, he aimed for the highest income with a 10-year period certain. However, he was unaware that he had significantly more flexibility and full access to his funds after activating his income stream, unlike with a SPIA or DIA annuity. Purchasing an annuity involves considering numerous factors beyond just the payout.

John Stevenson, CFFOwner and Advisor at Stevenson Retirement Solutions

John Stevenson, a Certified Financial Fiduciary®️, specializes in securing retirements with tax-free accounts. With a focus on guaranteed retirement, he’s ensured none of his clients suffer from market fluctuations. As a renowned educator and podcast host, John empowers thousands weekly, sharing his expertise in minimizing taxes and protecting against financial downturns.

Scenario 2 – Lori

Name: Lori

Age: 60

Looking To Invest: $100,000

• Lori wants guaranteed income during retirement
• She purchases a deferred income annuity set to start paying out when she’s 65
• She also wanted to have protection for her heirs

Monthly Payout: $616

Lori wants to lock in a future stream of income to complement her 401(k) and Social Security benefits once she retires at 65 years old. She decides to go with a deferred income annuity, which allows her investment to grow for five years. She also wants to make sure her heirs have money after her death. For this reason, she chose the 10-year period certain option. 

This will guarantee that payments from her annuity will continue for at least 10 years, even if she passes away early. This added guarantee does reduce her annual payout, though, since the insurer is taking on the additional risk. Her gender and the fact that she is on the younger side also reduced the yearly payout, since she will statistically receive payments for more years.

Scenario 3 – Brett & Susan

Name: Brett & Susan

Age: Both 70

Looking To Invest: $100,000

• The couple wants to make sure at least one person would continue receiving income
• They purchase a joint life annuity

Estimated Monthly Payout: $408 as long as one spouse is alive

For Brett & Susan, the most important thing was that either of them would still receive income, even if one of them passes away. This is why they chose a joint life annuity, which will still pay out even after one spouse dies.

They also wanted to protect their heirs in case they both pass away early, so they opted in for the cash refund feature. This will guarantee that if they don’t receive payments equal to the $100,000 premium, the remainder would be refunded to a beneficiary. Since the insurer could be making payments for over 20 years across two lives and have to issue a refund, the annual payout is lower. Their older age does help since it shortens the expected payout horizon, but the dual-life and refund guarantees have a stronger effect.

Factors Impacting How Much a $100,000 Annuity Pays Per Month

Annuity providers calculate payouts differently for every annuity contract. An annuity with a $100,000 premium can have widely varying monthly payments depending on factors like the annuitant’s age and gender, the type of annuity, the payout period and any provisions or riders that are added to the annuity.

• Annuitant’s age: Life expectancy is used to calculate the payout of an annuity contract, so your age and gender impact how much you’ll receive from your annuity. The longer you’re expected to live and receive payments from your annuity, the less you’ll receive each month in annuity payments.
• Annuitant’s gender: Because women tend to live longer, a woman with a $100,000 annuity will likely have a lower monthly payment than a man of the same age with the same annuity.
• Type of annuity: If you purchase a deferred annuity with an interest rate, your $100,000 annuity will likely have a higher payout than an immediate annuity of the same premium amount.
• Payout period: Like with life expectancy, the longer you’re expected to receive payments, the smaller the payment amount will be. A 10-year period certain annuity will likely have a higher payout than a lifetime annuity. A $100,000 joint and survivor annuity that covers two lifetimes will have a lower payout than a single life annuity of the same amount.
• Riders: Certain contract provisions can affect how much your annuity pays out. For example, a return of premium rider or death benefit represents a greater level of risk to the insurer, so your payout amount will likely be slightly lower each month if you opt for these features.