Key Takeaways
- A $100,000 lifetime annuity could pay $608 a month for a 65-year-old woman who chooses to start payments immediately.
- The monthly payout of a $100,000 annuity is different for each customer, as annuity payouts are calculated based on several factors, like the annuitant’s age and gender, the type of annuity and contract riders.
- The older you are when you start to receive payments, the larger those payments will be. Men’s payments will be larger than women’s because women tend to live longer.
Annuity.org used data from the Institute of Business & Finance to calculate the expected payout of a $100,000 annuity. The estimates shown are for a $100,000 immediate annuity with lifetime payments. The payouts listed for a joint annuity with a male and female spouse assume that both spouses are the same age and that payments remain level if either spouse predeceases the other one.
Monthly Payouts for $100,000 Immediate Life Annuity
| Age | 55 | 60 | 65 | 70 | 75 | 80 |
| Male | $542 | $575 | $633 | $708 | $816 | $992 |
| Female | $525 | $558 | $608 | $683 | $775 | $908 |
| Joint Life | $508 | $533 | $567 | $625 | $692 | $800 |
Case Studies
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 Institute of Business and Finance, 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: $633
In this example, Frank uses a single premium immediate annuity (or SPIA) to set up a guaranteed income stream once he retires. An immediate annuity begins paying income within one year of purchase, so it does not accumulate value like a fixed or variable annuity might. This makes it easier to predict what the monthly payouts will look like.
Accounting for factors like his age and when the annuity will start paying out, we can estimate that Frank’s annuity will pay out $633 a month. This estimation is for a single-life policy, which means there’s no death benefit associated with the policy and none of the premium will be returned to Frank’s beneficiaries if he passes away before he receives the full return of his premium.
Scenario 2 – Lori
Name: Lori
Age: 65
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 70
Monthly Payout: $820
Lori’s circumstances are similar to the last case study. She wants to set up a guaranteed income stream for her retirement. But Lori isn’t ready to retire yet, so she purchases a deferred income annuity with payments set to begin when she’s 70.
In this case, Lori’s $100,000 annuity will pay $820 a month. Lori’s payout is somewhat larger than Frank’s because her payments are deferred by five years. While the annuity is deferred, it accumulates interest until payouts begin.
Lori’s age and gender also factor into her annuity payout. By starting payments at 70 instead of 65, Lori will receive a larger payment each month. That said, her payment is slightly reduced because she is female. A $100,000 income annuity would pay approximately $868 for a 65-year-old man deferring payments for five years.
Scenario 3 – Brett
Name: Brett
Age: 60
Looking To Invest: $100,000
- Brett wants to grow his savings before turning them into income
- He purchases a 5-year fixed annuity with a 6% interest rate
Monthly Payout: $1,036
When Brett’s $100,000 fixed annuity matures, he can annuitize the contract to receive roughly $1,036 a month in income. Brett’s payout is the highest of the three examples because of the type of annuity he purchased.
Brett purchased a type of fixed annuity called a multi-year guaranteed annuity or MYGA. This type of annuity earns interest at a guaranteed rate for a certain number of years. In this example, Brett’s MYGA earned 6% interest for 5 years before converting to income payments.
By purchasing an annuity with a guaranteed interest rate, Brett was able to grow his $100,000 annuity before he converted it to income. As a result, he can expect a larger payout than if he had purchased an income annuity with the original amount. However, it’s important to note that he also had the option of investing in a fixed index annuity with an income rider, offering a guaranteed rate of growth that may exceed the total interest earned in the MYGA during the same timeframe. In such a scenario, an annuity with an income rider might provide him with more lifetime income.
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 SolutionsJohn 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.
Certified Financial Fiduciary®️
Host of the popular Guaranteed Retirement podcast and YouTube channel
Studied Finance and Business
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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.
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